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Small Business and Self-Employed

4 questions to consider before you temporarily close your business

Due to COVID-19, cities are enforcing curfews, governments are issuing new guidelines, and many businesses are closing their doors temporarily. As a business owner, you may find yourself wondering if your business should do the same. But before you do, consider the following questions:

How to know when it’s the right time to close temporarily

As you think about closing your business for a time, you’ll want to consider key factors. These factors include government mandates, suppliers, your health, and more.

Consider external factors

Government mandates or recommendations 

Health organizations recommend avoiding gatherings of 10 or more. Additionally, some governments have enforced limits on restaurants and the number of people they should serve. Meanwhile, some health officials have mandated that citizens “shelter in place.”

The number of confirmed cases in your area

The number of confirmed cases in your area may affect your decision to close your business. If there is an increase in reported cases near your business, your local health department may advise businesses to close to protect the community.

Supplier availability

If your suppliers or shipping service have shut down production, they may also force your hand. As of March 11, 39% of small businesses negatively affected by the pandemic were experiencing supply-chain disruptions. That number is likely to rise as the pandemic creates ripple effects across global commerce.


How to manage external factors

As the pandemic continues to spread, more disruptions may be on the horizon. Here’s what small business owners can do to manage external factors:

  • Check government websites for updates on current restrictions from lawmakers and health officials.
  • Research the number of confirmed cases in your area.
  • Communicate with your suppliers to stay current on changes to shipment schedules. Ask your suppliers if they’ve created long-term plans. Then consider how these plans might affect your business. Notify customers of the potential for delays if your supplier is experiencing troubles.


Consider internal factors

Your and your family’s health

Consider your health if you’re within a group that health organizations say is at high risk for contracting the coronavirus. Consider your family, and if anyone you live with is at a higher risk. And keep in mind that you may not experience symptoms but can carry the virus and transmit it to others. If you feel your health or your family’s health is at risk, then social isolation might be the best protection. And that could mean closing your business temporarily.

Your employees’ health

Consider the health of your employees and their families. If employees are at higher risk of developing severe symptoms, then it may not be safe for them to continue working near others. Social distancing may help protect them, but not all employees can do their work from home. Consider your options, such as staggering shifts and limiting the number of people on the clock.

Your business revenue, cash flow, and savings

Many small businesses run on tight margins. And with people avoiding public spaces or stores, your business may be affected by low sales. Disruptions to cash flow can be hard on your finances. And you may have to dip into your personal savings to recover. Evaluate your finances and business performance to determine how much a temporary closure will affect your business.

How to manage internal factors

If any of these internal factors are influencing your decision, explore the following options:

  • Limit contact with any at-risk people who may frequent your business.
  • Follow the advice of health officials on reducing transmission.
  • Ensure everyone washes their hands regularly and doesn’t touch their face.
  • Sanitize high-traffic areas.
  • Maintain a distance of 6 feet (2 meters) from customers and other employees.
  • Stagger shifts so that employees are not all on the clock at the same time.
  • If anyone is sick, make sure they stay home.
  • If possible, ask those at higher risk to work from home to avoid contact with others.

If your business revenue or personal revenue is at risk of experiencing financial hardship, consider:

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Legal and financial risks

As the pandemic spreads, you may experience legal and financial fallout if you choose to stay open.

Legal risks

Government and health authority guidelines can change at a moment’s notice. Many cities have shut down restaurants, bars, gyms, and schools. If this happens in your city, do you have legal obligations to close your business? Potentially, depending on local mandates. Follow local guidelines and speak with a legal expert in your area if you’re unsure.

During this time, unprepared employers may be vulnerable to other lawsuits. These may be related to workers’ compensation, invasion of privacy, discrimination, unfair labor practice, and negligence. But business owners who stay vigilant, informed, and prepared can minimize potential risks to employees. And, in turn, they can minimize legal risks for themselves. Here are eight ways to help reduce legal risks:

  1. Remain informed of government and health authority guidelines in your area.
  2. Heighten hygiene practices to prevent the spread.
  3. Consider restrictions on returning to work if an employee is sick or has been exposed. Consult a medical professional if you are unsure of an employee’s risk of exposure.
  4. Be cognizant of your duty to care for employees. Follow government and health authority guidelines that apply to your business.
  5. Assess existing leave and pay policies in the event of an employee’s sickness or disability. As needed, revise policies to match current circumstances.
  6. Ease stress and anxiety in the workplace as much as possible. Consider if you can be more flexible in allowing time off, remote work, or other accommodations.
  7. Protect employee privacy and any personal health data they may be obligated to disclose.
  8. Create a contingency plan for the worst-case scenario. And follow all legal requirements for employee layoffs or furloughs.

Financial risks

Closing your business, even temporarily, can result in significant financial losses. So you’ll need to consider if you can afford to close and if staying open will cost more. Whatever you decide, you may still need to cover the following costs and expenses:

  • Employee pay. Will you continue to pay employees after you’ve closed the business? Or will you lay off employees and offer severance pay? Check laws for further guidance on layoffs.
  • Overhead costs. Contact your leaseholder, landlord, or loan provider to see if they can waive payments temporarily or accommodate payment plans. Then contact your utility provider to see if they offer a similar service. If not, you may still have to pay rent, mortgage, and utilities on your business, despite closing your doors.
  • Supplier costs. If you’re still receiving inventory, you still need to pay suppliers, regardless of sales. Speak with your suppliers to determine a course of action.
  • Miscellaneous expenses. You’ll need to consider monthly payments on business tools and credit card payments. Speak with each service provider to determine if they can offer financial assistance.

Other local businesses may provide some inspiration on what to do. Speak with your local small business council, neighboring businesses or business advisors to get advice. You might also speak to:

  • An employment attorney. They may be able to help you in the event of a layoff and ensure you’re compliant with all necessary laws.
  • Your accountant or bookkeeper. They will be familiar with your business’s finances and situation. They can also help you build a plan for when you hope to re-open.
  • A reputable business advisor. They can keep you informed of important changes in your area.
  • Your financial advisor or certified public accountant (CPA). They can help you make sure you have your personal finances in order.

Financial assistance for businesses that need to close temporarily

If you decide to close your business temporarily, you may need financial assistance to ride out the storm. Depending on where you work, you may have a few options for financial aid.


What to do if you get sick


1. Seek medical attention and follow WHO guidance

Consult your primary care doctor if you feel sick or are showing any of the symptoms of the coronavirus. Your doctor may direct you to a nearby testing site. Symptoms can include shortness of breath, a dry cough, fever, headache, and pressure in the chest. Seek immediate medical attention if you experience severe symptoms. Follow all national health authority and WHO guidelines if you test positive for the coronavirus.

2. Consider your health and ability to continue working

If you or someone in your household is at a higher risk for contracting the coronavirus, continuing to work may be risky. Unless you work remotely for your clients, continuing to interact with customers and clients could expose you to the coronavirus.

3. Consider the health of your customers and clients

If you work with your clients directly, you will also want to consider their health. If clients are at a higher risk of serious complications, you may want to work with them remotely or stop working with them temporarily.


4. Consider your ability to fulfill orders and meet customer needs

If you choose to continue working with clients, you will want to consider how this may affect your work. And if you get sick, your health might impact the quality of your work. Consider how your customer service, work, and results might suffer if you get sick and choose to stay open.

5. Consider your ability to get financial assistance or additional workers

Your business and personal finances might suffer if you choose to close your business. But the cost to run the business might also hurt you financially if you choose to stay open and lose sales. Consider the financial safety nets you have in place, and if you can apply for financial assistance in your area. Finally, consider if you can hire someone to take over your work in the event you get sick or need help.

Making your decision

Temporarily closing your business is a serious decision. It’s important to weigh all the factors. Seeking advice from experts and advisors can help you make the best decision possible. The good news is there’s more assistance available to small businesses right now than ever. With help from the community, your state, and the federal government, small businesses will have the options they need to weather the storm.



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