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In response to local businesses being impacted by COVID-19, Maryland Gov. Larry Hogan announced an emergency relief fund. Recent social distancing measures have caused businesses to cut back on operations or stop entirely. Loans and grant funding will be provided by the Maryland Department of Commerce in order to assist struggling businesses.
Current social distancing measures are intended to help stop the spread of the virus. The common cold can develop one to three days after coming into contact with someone who has it. In contrast, COVID-19 can develop after two weeks of coming into contact with it. Gov. Hogan’s announcement of the fund was a part of the same news conference where he announced that all “non-essential” businesses would have to close. Among the non-essential businesses include indoor sports facilities and indoor entertainment businesses.
The Maryland COVID-19 fund
Grand funds and loan funds will be a part of the $175 million program. There will be a loan fund of $75 million given to for-profit businesses of 50 employees or less. The loans provided will be up to $50,000 and avoid exceeding three months of cash operating expenses. A grant fund will give $50 million to businesses or non-profits that have up to 50 employees. It’s an important investment given the arts are a strong force in the economy, with 113,000 nonprofit arts organizations employing 2.2 million artists.
The grant provided will be up to $10,000 and funds will not exceed three months of cash operating expenses. In addition to these funds, a $7 million layoff aversion fund is being given through the Maryland Department of Labor to help prevent unemployment. Applicants will receive up to $50,000 for technology to work from home, sanitization costs, or training opportunities.
A $5 million manufacturing fund is also being developed to incentivize small businesses and entrepreneurs that manufacture protective equipment, masks, and other supplies needed by health care workers.
Previously Gov. Hogan had announced that Maryland had been designated by the U.S. Small Business Administration for its Economic Injury Disaster Loan Program. The state had to show five businesses that were impacted by COVID-19 to get the designation. Impacted Maryland businesses can apply for this program and be provided low-interest federal loans.
How entrepreneurs can save money
While the emergency funds will help many small businesses and entrepreneurs, others may need to take more significant measures to save enough money to keep operating. One analyst warns that up to 15,000 retail stores may permanently shut down during this time.
It’s important for business owners to consider different areas where costs can be cut. One option to consider for reducing business costs is making your business more energy efficient.
When reviewing energy use in homes, the U.S. Department of Energy found that 25% to 40% of energy was wasted. The cause of the waste was partially due to contaminant build-up in HVAC systems, which caused it to work harder. Businesses can invest in cleaning their HVAC systems of contaminants to reduce energy use in their facilities and cut costs.
In addition to cleaning contaminants, a smart thermostat system can help cut climate control costs in the office by using heating and cooling as little as possible. Businesses can also save more by going green. An example of this would be using LED light bulbs. The initial cost of acquiring them is high, but LED light bulbs use 80% less energy than traditional bulbs and last 200 times longer, which allows businesses to save more in the long run.
Another example of going green is going paperless. Small businesses can save in this way by not needing printers, and needing less office space, filing cabinets, and postage. Staff can resort to primarily using e-mail instead. If you can allow your staff to work remotely, this can safe on office space too.
Another cost-saving option related to office space is sharing it with another business. Paying rent for an office can often be expensive. Your business can seek the office sharing services of companies such as WeWork and The Office Group. Additionally, you could also find other local businesses to team up with to hire an office space that you can share. Your business will be able to save money by sharing costs on cleaning, printing, reception staff, heating, and other business costs.
Whenever your business is need of new equipment, purchase generic or used items. At times it may be necessary to purchase a new item, but if you can find a used item that still functions well, it can be a huge saving. Used items can cost up to 75% less than new items.
Businesses should additionally consider finding ways to save on monthly overheads. This may be a difficult area for business owners to figure out how to save, as 60% feel they aren’t knowledgeable about finances and accounting.
Making use of price comparison sites can help make the process simpler by aiding in evaluating the lowest costs for expenses such as utility and insurance.
Owners should also look into evaluating the best quotes offered by accountants, software providers, and other suppliers that are utilized. Finding better offers from competitors may also help provide leverage in renegotiating a better deal with current providers.
One final area you can consider cutting costs is with advertising. Promoting a business can be done in many ways that can require little or no cost. Consider replacing expensive magazine ads with targeted social media campaigns.
You can also pursue guest post blogging opportunities on popular sites or start a website to produce content that helps your business be seen more on search engines.
In general, small businesses should consistently re-evaluate their expenses to find areas where costs can be lower. In these times of uncertainty where it’s unclear when normal business operations will be able to resume, every dollar saved can make all the difference.