As many businesses adjust to the new environment across California, the question lingers for many: What does this mean for the future? A lot of businesses were already running on narrow margins before COVID-19, so for some, it means a pivoted business model to sustain profits—or risk closing their doors.
CB&T Senior Vice President and SBA Lending Manager, Gloria Miller, agrees that it may be hard to predict the next steps for many businesses during the evolving COVID-19 environment, but it strongly depends on whether the organization was negatively affected.
“I would suggest businesses wait and see or go into more of a defensive role,” Miller said. “Now is not the time to make big expenditures or expand their business. It may even be a time to see how it goes or ‘hunker down.’ However, if a business is unaffected by COVID-19, I certainly wouldn’t tell them to deny a good opportunity as interest rates and commercial real estate [prices] are low. It depends on the business and its liquidity and resources.”
Some businesses, such as the Autry Museum of the American West in Los Angeles, have been able to make quick changes to operate under current pandemic circumstances. The organizations has 190 employees and is known for its content and exhibits on native voices and stories. With the shelter-in-place order in March, the museum had to temporarily close its doors to visitors. However, the organization received a Paycheck Protection Program (PPP) loan to keep the team on payroll and help pivot its content to a more accessible digital format.
“This pandemic has been a catalyst for us,” said David Cartwright, Chair of the Autry’s Board of Trustees. “It forced us to move more quickly toward virtual content, an idea that we were slowly moving toward but were forced to activate in a month. We are now able to do more online programming, utilizing social media, virtual productions and more.”
If businesses are finding themselves floundering and worried about the future, Miller advises them to get ahead of the issue and be realistic with their finances.
“Be proactive with your bankers instead of holding off on disclosing your finances,” Miller said. “It’s better to work transparently and be up-front about your challenges rather than waiting until you’re desperate. Depending on your needs, the banker can do a waiver and possibly a loan payment modification. Other options [include] cutting expenses and delaying expansions.”
Adelaide’s Florals and Events in La Jolla, California, lost many of its summer event contracts due to COVID-19. Much like a restaurant, the business deals with perishable goods and requires a consistent cash flow to keep the business going.
“There’s no crystal ball, no one knows what is going to happen in the fall,” said co-owner of Adelaide’s Floral and Events, Jerry Parent. “We’re learning that we can’t operate the same way we have in the past. What we do know is that we will find a way to survive. We’re lucky to get a PPP loan, but we will probably need to reformat how we do business to protect the company and everyone’s health and safety.”
While many other businesses are operating in “To be determined” mode for the remainder of 2020, Miller encourages business owners to stay optimistic and positive.
“We will come out of this situation,” she said. “You might have to work harder, and it may take a little longer, but it will certainly get better.” [cite::171::cite] [cite::172::cite]