COVID-19 has impacted every business. In some cases (e.g., Amazon), the virus has boosted sales as consumers are purchasing more online; however, not every business has enjoyed such success. Indeed, businesses that rely on in-store purchases, restaurants and bars and personal service providers have had to endure mandated closures and restrictions on re-opening.
Navigating today’s reality is difficult enough without the added pressure of operating a business with fluid compliance requirements. This article explores three considerations to make before reopening your business during the COVID-19 pandemic.
1. Implementation of Controls
What type of controls, if any, will the business implement to ensure compliance with any and all requirements at the Federal, state and local levels? This can include limitations on the number of people that may be onsite at the location, safety measures to protect both employees and customers and additional sanitary efforts. Writing down these measures is important, but the key is implementing sound controls to avoid non-compliance. As an example, does the business implement checklists and sheets that track certain activities? Who is responsible to verify the work actually occurred? Thinking through controls and effective implementation will help keep the business open.
2. Manage Costs
At this point, most businesses have already had those difficult conversations on costs - employees, landlords, supply chain, etc. Reopening a business may require business owners to do more with less. As an example, if a restaurant is required to implement social distancing of 6 feet between tables, then the number of attendees will be reduced; however, the significant contributors to overhead - rent, insurance, utilities, etc. - will unlikely be impacted. Yes, certain costs will decrease (e.g., food costs and employee salaries), but the incremental savings will unlikely outweigh the loss in revenue. If the business has a lease, then what happens once the business reopens? Does the business owner (i.e., tenant) lose the benefit of a forbearance agreement? Understanding the cost implications of reopening is critical prior to actually reopening.
3. Maintain Brand Awareness
While COVID-19 may have negative implications on business profits, business owners in a position to reopen should nonetheless consider reopening. Yes, the business needs to implement new controls and understand its costs, but continuing to remain closed may ultimately be worse than reduced profits, or for that matter, breaking even. Aside from the psychological benefits of “getting back to business”, reopening the business allows the business to maintain its brand. Indeed, businesses that remain closed for extended periods of time need to account for the loss of marketshare and what an extended absence will do once the business does reopen.