Three ways small businesses should prepare for a second COVID shutdown
With the COVID Delta variant on the rise and the CDC recommending mask-wearing again, small and medium-sized businesses (SMBs) should be preparing for a possible second wave of coronavirus and possible lockdowns. The Centers for Disease Control (CDC) updated its guidance for fully vaccinated individuals the week of July 26.
The CDC says that fully vaccinated people can participate in many of the activities that they did before the pandemic. However, for some of these activities, they may choose to wear a mask, particularly if they are in an area where COVID infections are on the rise. The CDC further suggests that fully vaccinated people might choose to mask regardless of the level of transmission, particularly if they are immunocompromised or at increased risk for severe disease, or if someone in their household is compromised or unvaccinated. People who are at increased risk include older adults and those who have certain medical conditions, such as diabetes, overweight or obesity, and heart conditions.
The recent uptick in COVID infections reminds us that despite our hopes, COVID is not over. We are going to have to live with it. While another full lockdown of the economy is unlikely, it is certainly not out of the range of possibility. Businesses that have just started to get back on their feet may again face a slowdown. If COVID numbers continue to rise as the colder weather returns in the fall, people may become fearful about how much they go out, and the places they visit, including restaurants with indoor dining.
Until the disease is truly contained, small business owners must prepare for the possibility that governments may put restrictions back into place and that customers will scale back their eating, travel, recreational, and other spending plans.
Streamline operations to cut costs
During America’s booming economy for much of the past decade, companies sometimes became fat and happy, rather than lean and mean. However, during the pandemic, businesses have had to do more with fewer employees due to labor shortages, COVID fears, and unemployment benefits that give workers more money than if they worked.
Small business owners should consider adjusting hours to avoid staying open and incurring labor costs during slower periods. Restaurant owners should do a cost analysis to determine if staying open later into the night actually brings in more revenue. If keeping the lights on longer costs more money than it generates, it may be time to scale back. COVID has caused a correction in many parts of the economy, hours of operation are included.
Restaurateurs took the opportunity during the pandemic to build the takeout and delivery segments of their businesses. They also invested in online ordering and promoted their menu offerings through digital marketing efforts and social media. Naturally, taking care of takeout customers is less labor intensive than having servers wait on indoor diners. Those eateries that were able to pivot were the ones who emerged stronger. Those who could not adapt often did not survive.
Another option is to look for ways to automate tasks that are labor intensive. Since costs have risen and the availability of willing workers seems to be infrequent, business owners must mull over options that enable their companies to operate as efficiently as possible.
Stash cash
Many industries are rebounding right now. According to commercial real estate information and analytics provider Costar, hotel occupancy is on the rise, although it is nowhere near pre-pandemic levels. Thanks to the easing of pandemic-related restrictions, rising vaccination numbers, reduced commuting costs, and pent-up demand, consumer spending in restaurants has trended steadily higher in recent months.
Restaurateurs that are doing well this summer would be wise to put away a larger share of the money they earn while times are still high. If the coronavirus continues to spread, even people who have been inoculated might want to scale back their exposure to crowds of people in the fall. Additionally, the possibility exists that restrictions could be reinstated, just as they have been in other countries including Japan, which is hosting the Olympic Games.
True, it’s an old-fashioned concept: saving money for a rainy day. But it’s also smart. Hopefully businesses spent their PPP money wisely, had their loans forgiven, and got themselves again into the black. If at all possible, small business owners should try to put away 7-10% of their income to have cash reserves if slowdowns come again.
Increase cybersecurity measures
One way that companies responded to COVID lockdowns last year was to let people to work from home. Business owners allowed people to bring their laptops home and/or bought new ones so that employees could work remotely. However, with more employees working remotely, companies increased their susceptibility to cyber-attacks. In fact, hackers had a very good year during the pandemic.
Why are SMBs vulnerable?
“Usually SMBs do not have a dedicated IT Security department, or if they do, the department is overwhelmed with a huge backlog of requests and does not have the resources to implement security solutions. They are stuck in ‘firefighting’ mode and do not have time to do the proactive work to prevent attacks before they happen,” says John Whaley of Prove, a leader in digital security.
Most cyber-attacks come down to authentication and account takeover, where the hacker gets access to a privileged user’s account via a variety of techniques, including phishing, social engineering, guessing a bad password, SIM swap attack, or a security exploit. Once they have access to a privileged account, there is no limit to what cyber criminals can do.
“When people work remotely, it is harder to tell if someone connecting remotely is a legitimate employee or a hacker,” Whaley adds. “Remote users are asked to authenticate more often, which makes them much more susceptible to phishing attacks because they are used to having to enter their credentials multiple times. They also might not think twice about clicking on a videoconferencing link that asks them to install software on their computer.”
With cyber-attacks becoming increasingly common and more costly, small business owners should invest in their IT security. As criminals have upped their capabilities, businesses must respond by making it harder to hack. Implementing multi-factor authentication to protect against bad or stolen passwords can make account takeover attacks much more difficult.
Another tactic is purchase IT insurance, which typically covers a business's liability for a data breach involving sensitive customer information, such as Social Security numbers, bank account and credit card numbers, and health records. Additionally, companies should run regular offline backups to combat the dramatic increase in ransomware attacks.
Small business owners must take to heart the lessons of the pandemic. To survive and thrive, they must learn to adapt to changing customer behavior, be smart with their money during flush times, and invest in efforts to present cyber theft to protect their assets.
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This article was written by Rohit Arora from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
