Editor's note: In early March, Inc. reported on how small companies across the U.S. were preparing for disruptions related to the coronavirus outbreak. Here's an update on the steps they're taking to respond to the rapidly changing business environment.

Pacific Manufacturing: Crafting new work arrangements

The coronavirus has only just started to hit San Diego, but Pacific Manufacturing, a private-label sock business, has seen how quickly it could change everything. Its 12 employees in Haining, China, have finally returned to work in staggered shifts--a social distancing measure--following a two-week quarantine.

Founder and CEO Harold Robison says he is ramping up preparations for his six U.S.-based employees, by:

  • changing the company's sick-leave policies to ensure that everyone will get paid in the event of extended stretches of illness,
  • pausing hiring plans due to the possible difficulty of onboarding new employees remotely, and
  • investigating the liability issues of hosting child care in his office.

Next week, the company will test remote work arrangements for all U.S. employees for three days. Robison says a longer-term work-from-home policy could come as soon as the following week.

At the beginning of March, Robison predicted a 15 percent drop in 2020 revenue due to decreased supply. Now, he's worried that he failed to account for the drop in demand that extended quarantines and an economic downturn would bring.

"If no one's going outside, they're not buying apparel," he says. "We're all kind of waiting to see if it's going to be back to normal in 60 days, or if this is a new reality."

Wonderffle: Keeping the cash flowing

Give Wonderffle's Mike Bradford some credit for making the most of a tough situation. The Pflugerville, Texas-based waffle-iron maker's founder and sole employee still isn't receiving inventory from China. He's been sold out of his top-selling product since early January. But he's been given a target date of mid-April to start getting products again. 

To help cover the weeks of lost revenue and opportunity, he recently withdrew $8,000 from his 401(k) plan and switched up his sales strategies, sacrificing profit margins to ensure a base level of cash flow. Meantime, he's been creating prototypes for a new product line in his garage and filming YouTube videos featuring his stuffed-waffle irons. He says the videos have already led to a partnership opportunity with a flour company.

His products are practically the definition of non-essential items, Bradford acknowledges, meaning an economic downturn would be particularly problematic for him. But he isn't panicking yet.

"I'm optimistic, because I've invested a lot in this business so far. And it's too early to be pessimistic about it," he says. "We talk next week. It could be worse. But right now, things are still looking OK."

Cool Beauty Consulting/Nova Salon: Leading with optimism

Bennie Pollard owns a two-location hair salon business, as well as a company that supplies products for hair salons. Most of the employees of Louisville-based Cool Beauty Consulting and Nova Salon are either hairdressers or salespeople. It's hard to do someone's hair without physical interaction, and it's hard to close deals over Zoom.

Not surprisingly, Pollard foresees a dip in sales over the next 30 to 60 days. But he's also predicting an upswing once the coronavirus passes, with stir-crazy consumers wanting to get back out into the world.

"I don't think we'll make up all of the loss," he says. "Yes, I think we're going to get tested a little while. We're going to lose some momentum. But I also think that the upswing is going to be real sharp."

Some of that upbeat rhetoric is a leadership strategy, Pollard says. "We have to help our people feel better about the current situation," he says. "That optimism is going to spill over into my people. And I need them to have some emotional support, so they can still concentrate and do some nice business."

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Published on: Mar 13, 2020