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Retail Survival Post COVID-19 (Part 3)

Written by CMG News Contributor, Doug Carlton


In an economy where COVID-19 cases are suddenly increasing and some cities and governors are beginning to backtrack on their reopening orders, and where jobless claims keep climbing, recovery for many retailers may be pushed farther out. This means that having adequate cash flow to continue to operate becomes even more critical than it already is. You need to seriously analyze your cash flow. Don’t just do one cash flow analysis. Do a best, conservative, and worst-case analysis because, based on your earlier studies of sales and expenses, you need to see clearly what your burn rate is under each scenario. Once you have determined what these numbers are, you should be in a strong position to make some serious decisions about your business. Improvement in the economy will be slow.

But also, once a successful vaccine is developed and tested – which could still be many months – it then has to be manufactured. Suppose it is a pill to be taken once a day. There would still be the need to manufacture two to three hundred million pills. Manufacturers would have to ramp up. That can't happen overnight. They then have to get to the distributors who then have to get them to the doctors who then have to get prescriptions written for patients. But suppose it’s an injection. Everyone has to get to some place where injections can be given – much more time-consuming. All of that potentially adds time to a fuller recovery. So if your projections show that you can’t sustain your cash flows long enough to get through this period you may have to consider the possibility of exiting your business while you still can.


Another critical reason to understand your cash flow is the potential for needing financing at some point in the future. After looking at your credit report (another thing you want to monitor very closely) the most important thing a lender is going to look at is whether you have enough cash flow to support the monthly payments on the loan you are requesting. If you don’t have a relationship with a commercial lender where you have your accounts, you should. It will be a commercial lender that will be analyzing your loan request and not a branch manager. Having a banker that understands your business and how it operates and understanding your cash flows could go a long way toward obtaining a loan in the future if you need it.


Semper vigilans – Latin for “always watchful.” The economic news changes so fast that some commentary in this paper did not have any citations because by the time someone reads this there could have been changes, and sometimes substantial ones. The Federal Reserve makes projections. Various economists make projections or analyze data. Business leaders render opinions. As of this writing it is estimated that some 25,000 retail stores may be gone in the next twelve months. That was the projection at the time. It may keep changing. Over the next two years, and probably beyond, consumer spending may continue to be very cautious until either there is a vaccine or at least a proven successful treatment for COVID-19. This caution is going to mean that retailers are going to continue to operate in a difficult environment. This is why we say “always watchful.” It is critical for your business to stay on top of news and trends every day because you may see something that could have an impact on your business, either positive or negative. Analyze your plans every week and take actions accordingly. The small retailer that manages its business in the minutest detail should have the best chance to survive and grow.

If you don’t analyze your plans every week, why plan?

Excerpted from “Survival Guide for the Retailer in a Post-Covid 19 Economy” by myself and Steve Spiro. If you would like a full copy send me a message with your email address. There is no cost.

SCORE is a Resource Partner of SBA. SCORE’s mission is to help small business owners start and grow their small business, and as a Resource Partner of SBA there is no charge for our services. For more information contact Richmond SCORE at


This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug is a mentor with SCORE, Startup Virginia, and Lighthouse Labs, and has 25+ years of experience in small business finance including 12 years in SBA lending. To contact Doug directly, please email him at

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