May 26, 2021 | Last Updated on: August 16, 2023
As of May 28, 2021, the Paycheck Protection Program has run out of funding. You can learn more about the PPP with our COVID-19 resource hub.
It has now been over a year since the implications of the coronavirus pandemic on public health caused the United States federal government to impose broad-based public health orders meant to curb the spread of this deadly virus. Social distancing, face-covering requirements and mask mandates, forced closures, stay-at-home orders, adjusting to new personal protective equipment (PPE) and safety regulations, and many more of the COVID-19 crisis’ implications have been a source of painful disruption to small business owners. Recent news, however, suggests that this status quo is due for a massive shakeup.
Near universal access has caused vaccination rates to rise sharply through the first and second quarters of 2021. As of May 16th, over 47% of Americans have received at least one dose of a COVID-19 vaccine. Almost 37% are fully vaccinated, with two doses of the Pfizer or Moderna vaccine or one of Johnson and Johnson. Americans protected from the virus through these medical miracles are more and more comfortable re-engaging in pre-pandemic behaviors.
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| Case counts, partially as a result of mass vaccination, are also dropping precipitously. This situation is different across different states, but the story is generally the same. |
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Other big news in the fight against the COVID-19 pandemic has also come out: The Centers for Disease Control (CDC) has lifted its mask mandate guidance for those who are fully vaccinated. This guidance has had mixed reactions. Some states like New York have opted to implement this advice quickly and lift their mask mandates, with others like California and New Jersey choosing to phase them out more slowly or double-down respectively.
The implications of these changes, in any case, are clear: states across the country are launching and implementing general and business reopening plans, in particular the nonessential businesses, to transition out of our new normal. From white house task forces to statehouses to local governments, reopening has become a hot topic for discussion and debate.
Reopening plans, largely, have been up to states to develop and implement. While national agencies like the CDC and U.S. Small Business Administration (SBA) provide guidance and suggestions, ultimately, it’s up to states and local authorities to determine what’s right for their populations. This has resulted in what many have called a “patchwork system of trial and error”.
So, while we can provide general trends and ideas similar across most plans, it’s important to consult local authorities and plans for the rules and regulations that will apply to your reopening. Some great resources for this include the New York Times’ interactive infographic, the US Chamber of Commerce’s state-by-state reopening guide, and the US Chamber of Commerce’s Digital Resources Center.
Most reopening are stage-gated plans that depend on a few key metrics, with different levels of reopening phased in as milestones are reached. These metrics always include:
As each milestone is reached, states will report their criteria for entering into the next phase and what that phase will entail along with sector-specific guidelines. Importantly, almost every state operates on a data-driven framework that allows for both progression and regression through the phases, depending on how the pandemic evolves.
Let’s use Illinois as an example of this. Illinois is currently in their “Bridge to Phase 5”. Illinois will fully reopen (move to Phase 5) on June 11th if half of the residents 16 and older have received at least one vaccine dose and coronavirus metrics have been stable or falling for 28 days. Between then and now, they have specific guidelines on how each “phase” will be implemented based on these metrics that outline how different types of businesses are allowed to operate and how their measures of performance will be tracked. For office buildings, the capacity restrictions are as follows:
However, there are also guidelines in place for moving back into Phase 4. If, over a 10-day period, any of the following criteria are met, the government will move the state back into the previous phase:
The guidelines also explicitly state that citizens are still to wear masks and practice social distancing, regardless of the phase, which differs significantly from states like Texas and North Carolina that have lifted mask mandates and capacity limits completely (with Texas making this call very early on March 10th).
Reopening will be a tough nut to crack for every small business owner, but there are two key things that will improve your probability of success tremendously.
Reopening plans, due to the nature of the US government’s response and strategy for addressing state-by-state circumstances, can be quite varied. While they are more similar than they are different, your state and local-specific guidelines are your best source for information and advice. In addition, organizations like the CDC and OSHA will have the best information for your purposes.
Find and read up on your state’s plans for general reopening. Analyze sector-specific advice and best practices. Study the latest market intelligence to gain insight into how reopening is affecting local economies. Understand your state’s vaccine situation: availability, requirements about employee vaccination, and the tools available to keep your workplace safe.
Here’s a starter list of the questions you should be looking for answers for from official sources:
Armed with this information, you’ll be well prepared to reopen successfully while abiding by all applicable restrictions and regulations.
In March of 2020, small business owners were faced with the massive challenge of completely reassessing and re-adjusting to a changing business environment. Financial projections had to be revised, supplier contracts re-visited, and business operations radically adjusted (depending on your sector). Many businesses also had to rapidly digitize to allow employees to work from home and maintain virtual engagement with new and existing customers. With reopening coming in earnest, it’s time again to make similar reassessments.
Understanding your business’s current and future financial situation is key to ensuring a successful response to state reopening. Especially if you are a retailer, food service, or similar in-person business, the ongoing economic recovery means demand for your products or services is going to increase significantly. This means increasing revenues, but it also has implications for increasing variable costs and working capital needs.
Smart small business owners will take time to analyze how their business might evolve across two key scenarios:
The likelihood of each scenario will depend heavily on vaccination and evolving infection rates in your state and region.
These scenarios should consider lots of things. If you received a Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL), you’ll need to factor in any unforgiven balances. If you haven’t gotten a PPP loan, you may still be able to get one. If you can take advantage of CARES Act provisions like employee tax credits, you should. If you need to hire additional workers to meet demand, you need to understand how you can sustainably pay them and ensure long-term retention. If you’ll need to make capital expenditures to acquire or repair necessary equipment or digital infrastructure, you’ll need to assess your credit options. If you need to increase orders from suppliers or re-engage in vendor contracts, those negotiations will need to be had.
Take the time to comprehensively consider your small business’s financial situation and plan for how to maintain and improve it as the country navigates reopening. This will be an iterative process. A best practice in the short term will be to engage in monthly check-ins to understand if your plans will continue to best serve your business.
As you reopen your business to a greater and greater extent, it’s also important to reconsider your operational needs. We’ll discuss a few of the key areas to consider below.
Communication with your customers and employees is paramount. Make an extra effort to be clear with your evolving mask policies and how you are implementing restrictions to keep your business safe. Make use of social media, easily observable signs, and verbal communication to ensure that expectations are clear. These messages should be included in any reopening marketing efforts that you are launching.
Issues of digitization will also be pressing. Many businesses had to very quickly adapt to a virtual environment, often sacrificing best-in-class security measures for speed-to-market. Digital tools like virtual private networks (VPN), online ordering systems, video communication software, file-sharing systems, and a variety of software-as-a-service (SaaS) platforms all have their own pros and cons. Understanding your business’s digital technology portfolio and how it may need to change, whether that means adding or removing certain services, will both rebalance your cost-basis and help you to execute your reopening business plan.
Regular business operations still won’t be totally “normal”, but there are still opportunities. It’s important to continue to emphasize safety when adapting to a changing environment. At the same time, this is an opportunity to innovate your business practices to be more agile in responding to customer needs and responsive to changing circumstances. The COVID-19 crisis proved that small business owners can adapt quickly – use those lessons to build a stronger business.
