Andrew Karas based and co-owns Asbury Park Distilling Co. in New Jersey
When the coronavirus outbreak started shutting down companies, Andrew Karas needed to assume quick about survive.
His enterprise, New Jersey-based Asbury Park Distilling Co., produces spirits and distributes them to eating places, bars and liquor shops.
“It’s tough. The industry that we serve has, for most part, been shut down,” stated Karas, who’s founder and co-owner of the distillery that employed eight folks earlier than the coronavirus pandemic started.
“We are trying to keep going as long as we can and manufacturing our product in hopes that the industry is ultimately going to pick up again.”
Distribution gross sales are down about 50% because of restaurant and bar closures, and the tasting room has seen gross sales drop about 75%, he stated.
The enterprise has been capable of stay open because of liquor retailer gross sales and curbside pickup of its spirits, which embody bourbon, gin and vodka, from its tasting room. It additionally rapidly pivoted to producing hand sanitizer and promoting it to companies — however it’s offering it without cost to first responders across the state.
While Karas has been capable of keep in operation, others have not been so lucky.
“This has been the most devastating time for small businesses that I’ve seen,” stated Karen Mills, a senior fellow at Harvard Business School and former administrator of the Small Business Administration below President Barack Obama.
“It directly impacts the cash available to small businesses,” she added, noting that they’ve, on common, solely 27 days of a money buffer.
In order to outlive and keep away from chapter, there are a number of issues small businesses can do.
1. Take benefit of presidency applications
Karas has reached out to his financial institution to begin the mortgage utility course of. He hopes it’s going to “keep us going a little bit longer.”
The “PPP” has already approved 860,000 applications for $210 billion of loans. Borrowers can apply for forgiveness for any funds used for payroll prices, mortgage, curiosity, lease and utilities over an eight-week interval.
“Everybody should be doing this,” stated Bob Prosen, CEO of The Prosen Center for Business Advancement.
If you do not have luck at one financial institution, attempt one other, he advised.
“Some banks won’t accept it if you aren’t already a business banking customer, but some will,” he stated. “If they tell you ‘no,’ shop around.”
Also, examine along with your state and city to see what loans and grants provided regionally.
2. Renegotiate contracts
Take a have a look at your accounts payable. Gather all of your vendor contracts, prioritize them, after which begin negotiating issues like decreased funds or prolonged phrases, Prosen advised.
While some could not agree, some will.
“Your suppliers certainly don’t want you to go out of business,” he stated.
You may work along with your landlord to attempt to forgo lease funds for a set period of time.
3. Collect any excellent money
On the flip facet, attain out to those that owe you cash and accumulate. If you had been holding an bill till work was completed, do not — as a substitute, invoice for the portion that was accomplished.
You may ask prospects for prepayment of a future exercise, Mills stated.
“The whole strategy is to stay liquid, so you could offer a discount on next year’s activity if people pay up front,” she advised.
4. Reduce employees prices
As painful as it’s, you need to scale back your employees as a lot as potential, both by layoffs or furloughs, Prosen stated.
Just ensure you deal with it with care.
That’s one thing Karas needed to do. He laid off one part-time bartender and a full-time bar again.
For those that stay in your make use of, make across-the-board “significant” pay cuts, he added.
5. Increase productiveness
Do as a lot work as is viable with the least quantity of individuals.
Right now, you will be higher off working longer hours with a smaller group than much less hours with a bigger group, Prosen advised.
You may enhance effectivity by working on-line.
Many firms have not made the transfer as a result of they do not essentially belief it, Prosen famous. In the normal mannequin, folks can discuss to one another within the workplace and know what individuals are doing. Now, companies have been compelled to maneuver to on-line platforms — and it has helped preserve productiveness excessive.
6. Signature required
Make certain that you simply modify all your signature approvals, regardless of the dimensions, in order that solely the proprietor can approve any spending, Prosen stated.
This means, nothing will probably be spent that you do not know about.
7. Look previous the pandemic
During this time, keep in mind to deal with your prospects nicely in order that they stick round as soon as issues get higher.
“From those current customers, you are going to provide exceptional service. More than you have ever provided before,” Prosen stated.
Communicate the standing of what you are promoting and supply useful hints. You may ask these customers for referrals.
Karas has embraced this concept by offering a free two as soon as bottle of hand sanitizer together with the acquisition of spirits from the distiller. The enterprise has additionally taken to social media to get the phrase out that they’re nonetheless open and promoting their merchandise for curbside decide up.
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