While COVID-19 continues to wreak havoc across the nation, small business owners are managing conflict and trying to remain in business.
According to the Washington Post, “The $2 trillion coronavirus relief package signed last week, officially known as the CARES Act, includes nearly $350 billion for a federal small business loan program called the Paycheck Protection Program. The program is designed to get cash in the hands of suffering small businesses quickly, with less red tape and fewer guardrails than the SBA’s existing loan programs. It is designed to incentivize business owners to keep employees on payroll by offering them loan forgiveness.”
I recently caught up with 20-year Conflict Resolution Expert Damali Peterman, who has appeared on NBC, CBS and other affiliates across the country, to unpack some of what small business owners have been facing.
Sergie Willoughby: How did you become a conflict resolution expert?
Damali Peterman: I became a conflict resolution expert due to a combination of family, birthplace, education and travel. I am the oldest of 7 children– I have been resolving conflicts daily since my third birthday after my first sibling was born. I was born and raised in Washington, D.C. where I had a front row seat to watch local and national politicians address problems and create solutions daily. Prior to obtaining my law degree, I completed an MA in international policy studies with a focus on conflict resolution and studied abroad in Mexico, Denmark, The Netherlands and Japan. I have also traveled to over 55 countries throughout five continents learning how different populations manage, prevent and resolve conflict. I have been resolving conflicts professionally for almost 20 years.
S.W.: What kinds of positions have you held where you’ve utilized your conflict resolution skill set?
D.P.: I have used conflict resolution skills in every position that I have held. Everyone, no matter their age, background or profession can benefit from learning techniques and tools to communicate more effectively. I have successfully utilized conflict resolution skills in every position that I have held both formal and informal including baby-sitter, art gallery salesperson, restaurant hostess, telemarketer, event planner, educator, mediator, negotiator, attorney, colleague, wife, mother, relative and friend.
S.W.: What industries do you think will be hardest hit by the coronavirus pandemic?
D.P.: I think the travel, hospitality, retail, and live entertainment industries will experience the harshest effects. Why? These industries rely heavily on people to be mobile and have disposable income.
S.W.: Are small business owners at more of a disadvantage due to the coronavirus pandemic? If so, how?
D.P.: Yes. Small businesses are the backbone of the economy given that, among other things, several studies show that as many as 2 out of 3 employees work for a small business. Even without a global pandemic present, there are several risk factors such as financial, reputational, business interruption, strategic, and security that affect impact small businesses disproportionately as compared to medium and large businesses.
Even with the state and federal governments enacting laws to mitigate economic injury caused by the outbreak, the financial impact of the coronavirus pandemic will bankrupt many small business owners who may have devoted their life savings to lifting their business off the ground. Unless small businesses are able to pivot or find a digital delivery of their services and products, many of them will have to permanently cease their operations.
S.W.: How should small business owners proceed when it comes to renegotiating contracts that were already in place prior to the fallout of coronavirus? What about issuing refunds?
D.P.: My companies, Damali Law LLC a boutique law firm specializing in small business transactions in New York, and Breakthrough ADR LLC a global conflict resolution firm, are assisting many clients navigate these two questions on a daily basis.
To varying degrees, everyone is experiencing the same economic uncertainty and our societal interdependence has never been more apparent. Open collaborative communication is key during these unprecedented times. On the one hand, you may have a contract in place that specifies what your obligations are, and the terms of your contract may not relieve you of those responsibilities even if the performance of your obligations are impossible or impracticable at this time. On the other hand, if you pick up the phone and speak to your creditor, landlord, vendor, client, etc. you may be able to renegotiate some or all of the terms given that many of your creditors are in your position or are empathetic/sympathetic.
Step 1 is having a conversation or asking someone who may have more experience negotiating to have the conversation on your behalf. Step 2 is anticipating that you are not the first caller. Start by asking what creative concessions they have made to others before you offer your suggestion (and you should have a suggestion prepared based on your working capital and cash flow). Their answer might surprise you. Many companies have also run their numbers, reviewed their contracts and know what they need to stay afloat.
On the topic of refunds, this depends on the specifics of your situation and the terms of your contract. Some services may translate well to virtual performance while others may not. Given that no one knows when this storm will pass, it is hard to know whether a refund is an appropriate remedy especially if part of the funds sought to be refunded were already utilized to create the product or service that you had intended to provide. Here is your opportunity to be creative and think of what suitable alternatives exist that make all parties feel supported.
S.W.: What’s the most important thing small business owners can do in times of crisis to ensure that they can rebound from a crisis and keep their businesses afloat?
D.P.: Envision where you want to be when this crisis is over and work backwards. This may seem like a strange thing to say given that most entrepreneurs have a forward-looking perspective and project several years in advance. I recommend this mindset change for three reasons. Consider how you many times you have already been tested as an entrepreneur, and see this as another test. Think about when this is over, what you want people to say about you as a leader and how your company handled operations and communications during a crisis. Lastly, you will learn things from this experience that will help you mitigate risk in the future. This too shall pass.