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  • Small Businesses Find Innovative Ways to Make Ends Meet

    Published on January 23, 2021

    Though the coronavirus is still ripping through global markets, small businesses are still chugging along. For some ambitious entrepreneurs, even a global pandemic is not enough to slow them down!

    Crafty business owners are finding creative ways to fund their business ventures even in the midst of quarantine. Here are 3 ways small businesses are making ends meet in the coronavirus economy.

    Why Businesses are Struggling

    The COVID-19 pandemic has ravaged the global economy. There is no beating around the bush: many small businesses are struggling, if they have made it this far into the pandemic.

    And unfortunately, the coronavirus shows no sign of slowing down. In fact, the virus seems to be mutating and may prove tougher to beat in the future While variations of the coronavirus have yet to have a strong impact on the course the pandemic has taken, health experts warn that potential mutations can complicate containment efforts.

    So businesses need to be prepared if the economy takes another turn for the worst. This may require a restructuring of the very core functions of your business. However, the decision whether or not to pivot your core model into something more flexible for the pandemic might actually become a choice of your company’s continued survival.

    Crowdfunding

    Traditional means of financing your business ventures have become increasingly inaccessible as a result of the coronavirus. Previously stable enterprises will undoubtedly be seeking help in avenues they would not normally turn to, leaving smaller businesses with more competition for life-saving funds.

    Venture capital as a means of funding startups is an avenue which is sluggish and takes years to materialize, so it is not a viable option for smaller enterprises or those just starting out. However, this type of crowdfunding gives businesses access to seasoned professionals to help guide them.

    On the other hand, equity crowdfunding is more accessible, more democratic, but also less reliable for long-term funding solutions. Equity crowdfunding includes crowdfunding platforms like Kickstarter and GoFundMe.

    Equity crowdfunding has definitely increased in popularity over the years, but it is still largely regarded as a risky, lower-quality investment when compared to traditional avenues of funding.

    Personal Refinancing

    If you own real estate assets, you may have options to refinance your properties. 

    One example of this is a reverse mortgage. You can only explore reverse mortgage options for your primary residence, but there is a plethora of benefits if you find you are eligible.

    You do not have to pay back a reverse mortgage loan until you move, the last homeowner passes, or the last homeowner sells.

    Essentially, a reverse mortgage is a loan secured by the value of your home. You still maintain ownership over your home. That said, you are still responsible for property taxes and homeowner’s insurance.

    You can use a reverse mortgage calculator like that from All Reverse Mortgage to see what loan amount you might be eligible for.

    Personal Loans

    Another option small business owners turn to in tough times are personal loans. Personal loans encompass a wide variety of types of loans, so your options are limited only by your imagination.

    Personal loan options tend to be riskier than traditional capital funding avenues for businesses. They also tend to involve more reliance on interpersonal relationships and connections within an industry.

    Personal loans include loans from family members, friends, coworkers, etc. They can also be personal loans you seek through other startup applications or small businesses.

    These days, you even have the option to apply for personal loans online. While the internet can be a great resource for funding opportunities, you will want to vet these resources carefully before committing. 

    After all, the internet is chock full of scammers and unreliable actors, so be careful out there! Only give your personal and financial information to businesses with good reputations.

    Learn to Pivot

    When it comes to remaining profitable during a pandemic, your business needs to remain nimble. If your small enterprise is too rigid to roll with the punches, it won’t survive the next mutation that sends workers back to their desks remotely!

    So when you are evaluating your company’s strategy for reentering the market once the pandemic slows, keep in mind how policies would translate if a strict quarantine is reinstated in your area.

    Even medical clinics are learning to keep up with the changing climate by repurposing their spaces. Keeping a business flexible can be as simple as maintaining a few remote work days a week. That way, when it inevitably happens again in the future, your company is at the ready with distanced procedures in place.