Community Economic Development Fund

Articles and podcasts to help plan and operate your enterprise.

Without cash, your business is as good as closed

By Frederick Welk
CEDF Director of Education

Businesses this March quickly went from normal to cautious to a standstill. No wonder small business owners were in a state of shock. Who would ever have predicted these events?

To add to confusion over when, how and if a small business could operate, owners worried about their own health and the safety of family members.

Numerous assistance programs unfolded in the course of a few weeks – the SBA Economic Injury Assistance Loan, the Connecticut Recovery Bridge Loan, the SBA EIDL loan advance (grant), the Cares Act covering the Paycheck Protection Program and the COVID-19 Business Response Line of Credit (for women and minority owners).

CEDF’s Business Advisors had uniform advice for our clients – apply for everything for which you are qualified. To add to the stress of more than a few late evening phone calls with anxious, upset clients, it’s perplexing for our Business Advisors when they feel like they helping throw a life ring at a drowning business owner, only to have the ring and sometimes the rope thrown right back ashore.

“I don’t want to take on any more debt,” was a common assertion. It’s a sentiment that under normal conditions would have brought praise for prudence. But these were not normal times and the terms of the assistance programs were amazingly generous. What our Business Advisors saw that some clients could not yet, was that events even a few weeks into the future were entirely unpredictable. Who could say if the pandemic would get catastrophically worse, or how long non-essential businesses would be shut down? And who could say if another chance for help would come?  Under these conditions, only liquidity matters. If you have no revenue and the meter is still running on certain fixed expenses, your business is sinking into the mire by the day and but what will save you is if you will have enough cash to pull out when business resumes. Remember, most small business owners, unfortunately, don’t typically have more than two weeks of cash available.

So it fell to our Business Advisory team to reinforce that a 30 year loan at 3.75% (EIDL), or a zero interest bridge loan, or a 1% PPP loan (if not entirely forgiven) was unlikely to be the demise of their business. But not having the money to pay a landlord when you are 90 days behind, or having utilities shut off, or being unable to order materials from vendors surely could.

Not to criticize those who felt fearful in those early weeks, but there is a very important business lesson that stands out from this experience. As businesses start to reopen this summer and many owners assess their financial condition after having lost so much revenue, we hope those who applied for and received all the help they could will find it was sufficient and reflect on this lesson – liquidity is everything.



Go-to Person’s Guide to Good Email Hygiene

By Bruce Tulgan

One symbol of the collaboration revolution must surely be the little “mail” icon on our devices. All day long it flashes the growing numbers of new emails puffing up our inboxes. But if you’re responding to emails all day long (and into the night), you aren’t likely to get “stuff” done.

Of course, maintaining this balance is even more important when working remotely. Email can become an even more unwelcome distraction when it is just one of a host of other electronic communications you must keep up with day to day.

Here’s some help:

  • Send fewer and better messages (you’ll get fewer back in return).
  • Before sending a message, ask yourself if you shouldn’t schedule a meeting (by telephone or video these days) with the person instead. Some things really are best communicated verbally.
  • Stop sending first drafts! Send first drafts to yourself.
  • If you are ‘messaging’ someone so you don’t forget to tell them something, instead send the ‘reminder’ to yourself.
  • Only cc people who need to be cc’d…. and only “reply all” if your reply is for all.
  • Use red flags and other indicators sparingly and with true purpose.
  • Make subject lines smart; context is everything.
  • Change subject lines on later emails if the subject changes.
  • Make messages brief, simple, and orderly.
  • Create a simple folder system for filing incoming and outgoing electronic communication based on how you will use them later.
  • Establish daily time blocks for reviewing and responding to electronic communication in batches rather than singly throughout the day. Manage people’s expectations by telling them about this practice. That will give them an idea of when to expect responses from you.
Bruce Tulgan is a leading expert on young people in the workplace and leadership and management. He is a best-selling author of twenty books, an adviser to business leaders all over the world, and a sought-after keynote speaker and management trainer. His company, RainmakerThinking, is based in Hamden, CT.  Bruce appeared recently on CEDF's Small Business As Usual podcast.

The Opportunity of Loss

By Nick Tarzia

Loss. We all are feeling it. Loss of business, loss of revenue, loss of customers, loss of children running through our stores, but hopefully for not many of us, loss of a family member or a friend.

We are living in a new world that has not finished changing. Losses will continue to pile up. And life will continue to change, not gradually but abruptly. Changes are happening in ways we could have never imagined six months ago. Gone are the days of business as usual. We have been catapulted 15 years into the future.

Now we are faced with a choice: To give up, or to take on this challenge as we always have as entrepreneurs and business people. We must adapt. To paraphrase Charles Darwin, “Those who adapt, survive.” We will survive this and we will be better because of it.

We will never look at our stores in the same way again. Our stores are now stock rooms. We collect and pack orders for pickup or for shipping. Our stores will convert to showrooms and event spaces to bring people together, and, hopefully, while there they will look at our product offerings and make a purchase.

I propose this: If we do not include an easy-to-navigate website, delivery and curbside pickup as a normal way of business, we will not survive. The omnipresence of our businesses is crucial to the future success of our businesses. The unfortunate circumstance is that the demand for these changes have come upon us quicker than we could have ever imagined, and for many of us, quicker than we were prepared for.

Opportunity is banging at our door! Current events have shown us that people still want to purchase toys, and will do so in the easiest way allowed. In these trying times, we have also been shown people’s desire and love for community. It is human nature for people to do what is most convenient. But with all things being equal, they will choose to support their community. This means it is essential for success to offer same-day local delivery, curbside pickup, while still being involved in the community. Our customers do not just want this they are demanding it. We need to answer this call to succeed. We can rise to this challenge. We can adapt and get excited again, about what we do. We can learn to connect in new ways.

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