We can safely say that the crisis the world is facing currently is pretty much without precedent in recent history; the coronavirus pandemic has slowed down the global economy to an extremely sluggish pace. And as always in these times, small business owners find themselves facing an entire host of different issues. If you’re running a business that allows for remote work, you’re in luck; you can set up communication channels and establish a workflow online.
But what if you’ve got a small manufacturing business that’s threatened by the pandemic? After all, a small production line isn’t something you can migrate online. Don’t worry, though – we’re here with a few tips on that.
Table of Contents
Manufacturing
In many ways, this crisis is a transformative one for the global economy. Most businesses that deal with manufacturing are in existential danger these days; you’ve got no option for working from home here.
And yet, if you don’t implement all of the required safety protocols on time, you and your employees may contract the virus and be out of commission for months, or even in mortal danger. Many businesses are forced to move, downsize or close their doors for good.
Safety Precautions
However, many plants and shops are still on track to a certain degree, and they’re still producing. Nevertheless, the work conditions in even the smallest production lines need to be modified with the pandemic in mind. First of all – social distancing is crucial. Actual physical contact between employees should be restricted as much as possible.
Secondly, working in shifts is going to be a must in order to properly enforce this social distancing policy. And there needs to be some time between these shifts, an hour at the very least.
At that time, and during the work hours, you need to take steps to carefully sanitize your workplace. Rules on personal hygiene also need to be more closely followed than ever before. Also, you will need to streamline your production process so that any non-essential personnel are not present, and can take a leave or work from home.
If you need to perform these optimizations quickly, PLM software can help you optimize operations in the midst of the crisis. And in case you decide to move your line to a more affordable location.
Financial Triage
Of course, apart from workplace conditions, there is another immediately pressing concern for a large majority of small business owners – are you going to be able to pay all of your bills? And that’s not just a question for this week or the one after that; we don’t have a clear view of how long this whole thing will last.
Naturally, that kind of question isn’t easy to answer, and even top World Health Organization epidemiologists are tentative on the details right now. With all of this in mind, you need to take some steps to optimize your finances for the months to come. Firstly, come up with a cash-flow budget; you need to have a clear view of the landscape when it comes to variable and fixed costs.
In most cases, the fixed costs are the ones that serve to keep your doors open, so you will have to pay those. But considering that, make a list that highlights your priorities, and attempt to set aside enough money for when the most important costs are due.
Also, you need to analyze any opportunities to cut costs that aren’t necessary; anything that’s not crucial to enabling the key functions of your business, and anything that’s not currently producing revenue.
There is a lot of talk of furloughs or layoffs of employees. Tread carefully here, seeing as your employees remain one of the greatest assets you have. If you go deep enough with the cuts, you won’t be able to rebuild your workforce efficiently after the crisis. In case you are not sure how to do this try hiring expert consultants to help you, this small investment will definitely pay off.
Furloughs are likely one of the most required measures in the current climate, and they can mean a wide variety of measures depending on your specific situation. For instance, your employees may not have to work at all and remain home for a period of time, or they could work but at a rate reduced from the usual one.
Tax Payments
In an unprecedented event, taxpayers have received an extension on their payments for three months – ending with July 15th. This was enabled by the Federal Reserve System for small business owners and individuals who owe up to a million dollars in taxes.
Bear in mind though, taxpayers are still required to file extensions or taxes by April 15th. If you don’t file there are penalties, though you won’t need to actually pay for 90 days.
However, don’t wait with payments on payroll taxes as an employer. These are practically considered sacred by the government, so you will be treading a dangerous line there. More specifically, there is no extension on these payments, and you’ll be facing significant interest rates and penalties if you fail to pay.
Disaster Assistance Loan
With the help of the Small Business Administration, the federal government has enabled up to $2 million in loans for small business owners; precisely what you might need in order to keep your business running. The purpose of this is to cover operational costs, payrolls, and business debt.
The maximum term for this SBA loan is 30 years, and the rate is a low 3.75%. While this may appear to be the most logical and safest choice, you need to remember something – at the end of the day, this is a loan, meaning that you’ll still have to pay it back. So, think carefully before deciding on this; if your business might manage to go by without it, accruing more debt isn’t something you need.
We hope you will make the decisions that suit your business and your circumstances. We invite you to learn more about Marketing Survival Spike For Businesses Through This Time.
