Business: Getting your business off life support

Getting Your Business Off Life Support

Ways to survive the global health threat, COVID-19 By Laura Dorsey

There is an economic saying: “When America catches a cold, Black America gets pneumonia.” The problem with this saying is that if we use that same correlation and COVID-19 is America catching a cold, there is no definition for what the COVID-19 pandemic will be to Black America.

A recent commentary asked, ‘Where are our Black leaders when we need them?’ The real question is, what does Black leadership look like? For so long, America has viewed African American leadership from a monolithic lens. There was a time when Martin Luther King, Jr., and Malcolm X filled that criteria for us, but the world does not work like that today.

Black America today faces wide-scale problems that must be addressed in a number of ways. The nation’s leading civil rights organizations requested an urgent meeting with House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer regarding racial equity in the coronavirus response proposal. Marc H. Morial, the president & CEO of the National Urban League; Melanie Campbell, the president & CEO of the National Coalition on Black Civic Participation and Convener of the Black Women’s Roundtable; NAACP President & CEO Derrick Johnson and Rev. Al Sharpton, the founder and president of the National Action Network, insisted that coronavirus response legislation must take racial equity into account. The fact is Urban communities of color are likely to suffer the brunt of the economic impacts of the coronavirus crisis, and any legislative response must contain targeted relief. The answer was ‘we hear you,’ but no definitive actions were initiated.

Now is not the time for a wait-and-see approach or half measures. The unemployment rate is predicted to hit a staggering 20%, the highest since the great depression. If history repeats itself, minorities will struggle the most and be the hardest hit. JPMorgan Chase indicates that the average small business has 27 days of cash in reserve, but minority businesses often have less than 20 days’ worth.

Dr. Eugene Franklin, the president of the Florida State Black Chamber of Commerce, suggests that small businesses should take this time to get their paperwork in order and work on their business plans. Normal is going to be different on the post coronavirus pandemic economic scene. If cash is king, then inventory is the queen. Failure to resource plan in these two areas will have catastrophic consequences. What is your plan to keep your customers/clients and employees? A strong market plan that creates a unique value proposition is nec

essary to create separation from competitors. Franklin suggests that we take a WIN (What’s Important Now) approach to the economic challenges that the COVID-19 pandemic brings. A reminder to small businesses that the government response used in the 2008 financial crisis did not work for minority businesses. Low-interest funds are not always easy to come by for minorities with limited access to money and very few assets. People are talking about investing in the community and letting money circulate as a way of strengthening communities. It turns out that there are 35 African American owned banks and credit unions in the United States. Two of them are in the state of Florida: 1) FAMU Federal Credit Union – Tallahassee 2) One United Bank – Miami. It will be essential to provide large-scale support for small businesses that have lost customers and had to shutter operations. His recommendation: • Apply for Small Business Administration loans, in addition to the disaster loans, which only apply to businesses in states that have declared emergency status. Some state governments are offering aid packages. • Explore private sector programs and fintech products. Facebook said it would offer $100 million in grants to small businesses. And fintech companies such

as Kabbage and Fundbox, which specialize in loans to small businesses, are also considering ways to support the sector. • Renegotiate terms of contracts and debt.

Owners should ask landlords for more time to pay their rent, for example. They should also ask banks to defer interest payments on outstanding debt temporarily. • One of the main issues is that incidents like this pandemic can strain a small business’s financial capacity to make payroll, maintain inventory, and respond to market fluctuations. Businesses can help themselves to prepare by exploring and testing their capital access options, including credit history, so they have what they need when they need it. Attached is a list of the various types of loans that are available for minority-owned businesses:

We are at an unprecedented time in our history. COVID-19 pandemic is having an impact on the health of our people, the businesses we rely upon, and the very way that we live our daily lives. But let’s be clear, we have been down this road before, just not at this scale. Strong leadership is critical. We will win this war; we just have to have a WIN (What’s Important Now) mindset.