Position your Business and Use the Programs Offered by your Government
Whether you are a grower, distributor, wholesaler, or a florist, running a small business in the floral industry is quite challenging during normal times but becomes extremely difficult during current times. With so much uncertainty around about everything, it is exceedingly difficult to move forward without information and a proper strategy to position your business in the best possible situation during this exceptional time. Make sure to have an economic crisis plan.
What Should you Do? Accept the Reality and be Proactive
The first thing you can do as business owners is to accept the situation and the current reality as soon as possible and take charge of the things that are in control and start taking actions rather than being a passive spectator. Meet your team and bring everyone on the same page and decide to expand not contract the business. Also it's important to assess liabilities and assets. Evaluate new markets. trends, new territories, and newer business models. Appraise all of this along with your strategy and understand what’s important and potentially significant. Keep the current, short term future and your long-term strategy in mind and then let go of anything that doesn't fit into your scheme of things, be it a product, a service or inventory.
Discipline yourself and your team. Discipline is very crucial in a remote working environment., proper follow-up, reporting, and accountability help to create discipline. Make a list of your products and offers. Focus on everything that you must do to produce revenue. And most importantly get help from the government. US government and many other governments has announced a few programs to help businesses and the economy. Most of us do not apply for these programs for two major reasons
- We are not fully aware of the programs announced by the government
- We are not sure if we need that money or not
Below, we are going to walk through two US programs that will help you with your economic crisis plan, and businesses you should apply for. (Of course, when not a US citizen check your own governments programs and make sure you apply for it. You can still read on, because the reasons to apply also count for many other countries).
- Paycheck Protection Program
- Economic Injury Disaster Loan
Money acts as blood for the business; we cannot run our business without money. Fortunately, the US government creates a program to bring access to capital to business owners. Every small business should apply for these programs even if you are not sure if you need it or not. Having this money will put you in a better place than having no money. You can always give it back if you do not need it. But if you do need it, you must have it. Your business will be much stronger when you bounce back.
- Paycheck Protection Program (PPP):
US Government has announced $659 billion funded under the Small Business Administration (SBA) Business Loans Program Account the fundamental purpose of giving this free money to businesses is to guarantee eight weeks of payroll and other costs and save jobs. This is more like a grant than a loan. If you have payroll and have under 500 employees, you should apply for it.
- Contact bankers after knowing about PPP Cares act
- Apply for Access
- Received SBA loan numbers
- Open a designated bank account for the proceed to comply
- Produce documentation required by the bank.
You can use this money for payrolls, for mortgage expenses, for lease, and utilities. 60 percent of the PPP money should be spent on payrolls. 100% of your loan could be forgiven if you follow guidelines. PPP loans have 5 years maturity period an interest rate of 1% on unforgivable expenses.
- Economic Injury Disaster Loan (EIDL):
If your business is making a loss of revenue during the pandemic, the government has designed to provide economic relief to business through the EIDL program. Up to $10,000 is provided in emergency relief under the EIDL program.
All the small businesses must apply for an EIDL. Your business must meet the definition and size standards of small business criteria and must be located in a declared disaster area. to qualify for an EIDL.
You can apply for an EIDL of up to $2 million to provide working capital for expenses to invest in sustaining the business going forward and for payroll costs. The interest rate is 3.75% and the loan term is approximately 30 years.
Once you submit your application you will be assigned a loan officer. The faster you respond to any queries of the officer, the faster your application will be processed.
As a small business owner, you can apply for both a PPP loan and an EIDL loan for the COVID-19. There are some pros and cons of using the money if you are applying for both like you can't use money from both loans for the same thing. For example, if you use the PPP loan for payroll, you can't use an EIDL loan for payroll too.
Track the Money
It is extremely important to track how you are using this money. Use the money you received on an extremely important thing and as per the guidelines of the government. Do not use the money on the things which are not adding incremental value to your business. Having money and wise use of it will help your floral business to sail through this challenging time and come out the other side of this—bigger, stronger, and more confident.
(NOTE: In case you missed out to apply for both of it. The government may announce a new round of funds. Keep looking for it and be ready to apply.)