How to keep your business afloat in today’s COVID-19 climate

It’s undeniable that what we are dealing with as it relates to the COVID-19 pandemic is unprecedented. There is no playbook, nor prior precedent to pull from here. Many businesses in the hospitality industry here in South Florida, including our restaurants, hotels, health and wellness facilities and the cruise-line industry, will be severely impacted from either significantly reduced traffic or complete closures.

With little to no revenue during this time period, how can these establishments survive? Well, there are a few avenues worth exploring to mitigate potential losses. The first is to review your lease.

For those not familiar with the term, force majeure in its simplest form is a contractual provision allowing a party to suspend or terminate the performance of its obligations resulting from an unforeseeable circumstance, such as a fire, flood, war, or an act of God.

The first question to ask: Is COVID-19 an act of God? From a business’s perspective, arguably, yes it is. However, unless your force majeure clause is specific about a pandemic, at the moment the answer to that question is still developing.

The second question to consider: From what performance are you seeking relief? Is it paying rent? Or perhaps a clause requiring your business to stay open a certain amount of days in the week? Your lease will be specific as to what performance is excusable based on force majeure, so the answer to that question will vary.

If your lease (or other contractual obligation) does not contain a force majeure clause, then perhaps your obligation is impossible to perform. Impossibility (sometimes referred to as impracticability) alleviates a party’s performance when the duty to render that performance is impossible and the issue causing the impossibility (i.e. COVID-19) is unforeseeable.

Another avenue worth exploring is getting ahead of the issue(s) and contacting your landlord directly to have a conversation. Your landlord will (hopefully) be inclined to work with you during this time period to provide some relief in the form of rent deduction or rent deferral. Nobody wins with empty real estate, so they’ll be inclined to support you (to some extent) during this time period.

Additionally, what does your insurance policy cover during an event like COVID-19? Does business interruption/loss of income coverage apply? This type of coverage is commonly included within a business’s commercial property insurance policy and helps a business recoup lost revenue and expenses resulting from a disruption to its operations.

Often, it is triggered when “physical loss or damage to” property occurs during a natural disaster, like a hurricane. However, it can also apply to losses associated with other events, such as disruptions to the business’s operations. As it relates to COVID-19, applicability will largely depend on the language to your specific insurance policy.

Also look into seeing whether your business is in a position to benefit financially from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was intended to deliver relief to small businsses through a variety of new programs. The Act is complicated — vagueness and red tape abound, as recent news stories have pointed out — but possibly, your business could be eligible for a loan and have that loan forgiven by the government if you’re able to keep your employees employed.

Last, and arguably most important: How can your business “think outside the box” to stay relevant during this period? Even though your doors might be closed, there’s intrinsic value in continuing the dialogue with your customers.

If you’re a restaurant, how can you adapt to this climate and continue to do business and/or interact with your customers? Take for example, Stiltsville of Miami Beach. Although they are closed, they are now offering curbside pickup orders. Additionally, many local favorites, such as Hometown BBQ and Fireman Derek’s are offering at-home delivery through various platforms such as Postmates, Uber Eats or Grubhub. (It’s worth noting, that many of these delivery companies have waived the delivery fee during this crisis.)

For restaurants that don’t have that capacity, then perhaps it’s continuing the “dialogue” with its customers via social media. Maybe it’s tweeting a recipe of the day for patrons to make at home during this time.

If you’re a workout studio with its doors shuttered, perhaps it’s providing content via Instagram for your followers to work out at home. Take for example KAMPS Fitness of South Miami. Co-owners Sam and Ari Karl lead a 50-minute live at-home workout each day to its followers (#Kampslive).

In any event, it’s the small things that might help your business survive during this unprecedented time period, so try and make of the most of them.

Our industry will get through this and come out stronger than before.

This story was originally published April 12, 2020 at 12:02 AM with the headline "How to keep your business afloat in today’s COVID-19 climate."