Ada Slivinski: Credit is not a universal solution for small business during COVID-19
The COVID-19 pandemic has most of the country on lockdown. Many households are practicing “social distancing” as recommended by health officials – and that obviously means they’re not out at local restaurants or shops.
Big companies like Apple, Nike, Urban Outfitters and Lululemon have closed their stores. Cadillac Fairview malls have limited opening hours and Starbucks has shifted to a to-go model, eliminating seating from many of their stores and encouraging customers to order on their app.
The impact is often felt most strongly by small businesses; new startups who have poured time and money into marketing hoping to bring people through their doors. or those who don’t have a strong online model.
On Friday, Finance Minister Bill Morneau said $10 billion would be available for small and medium-sized through the Business Development Bank of Canada. They could apply for credit to help them weather the storm. The problem, though, is that business credit makes sense when you’re opening a new location or buying inventory. Using credit to pay staff, rent your office or retail space means you’ll have to hustle even harder when things are back to “normal” to pay it back.
“We also know small businesses may struggle through this period of economic slowdown,” said Prime Minister Trudeau. “We are in the enviable position of having significant fiscal firepower available to support you.”
But credit alone is not the solution for small businesses. In order to survive, businesses need to innovate and move quickly. Some small businesses are doing just that: changing the way they deliver their goods or services. California restaurants Campfire and Jeune et Jolie have closed their dining rooms and are offering “Camp Jeune,” a family meal pickup model. Some conferences and networking groups, like Calgary-based The Ace Class, have moved all their events and interactions online.
Local fitness centre TURF has just announced they are closing all locations, with memberships automatically put on hold. The company had just opened their second store in Vancouver’s downtown, and said they are exploring avenues for virtual meet-ups.
The organization shop STIL just opened their Gastown location a couple of weeks ago and have now made the decision to close due to the outbreak, they are encouraging online shopping by offering a discount code so those working from home can organize their home office. Instead of just flattening the curve, these companies are ahead of it.
There is a movement online encouraging those in quarantine to support small business. The sentiment is a great one. Shopping small now – as always – keeps money in the local economy and supports hard-working entrepreneurs. That said, business isn’t charity; owners need to prove value in these rapidly-shifting times.
Not all business owners can or should to take out cheap credit and rest on their self-isolated laurels. It’s a chance to prove value and your place as an integral part of your customers’ lives. Because when people focus on what’s most essential, if the only thing you change is your credit limit, your customers will start to see your business as something they can live without.
Ada Slivinski is the Founder & Principal of Jam PR, a boutique agency focused on helping small businesses get big exposure. You can reach her at firstname.lastname@example.org