Q&A talks with Joe Ercolano, state director of the Connecticut Small Business Development Center (CTSBDC), which provides no-cost business advising to small business owners and entrepreneurs to start and grow their business in Connecticut.
Get Instant Access to This Article
Subscribe to Hartford Business Journal and get immediate access to all of our subscriber-only content and much more.
- Critical Hartford and Connecticut business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Hartford Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
Q&A talks with Joe Ercolano, state director of the Connecticut Small Business Development Center (CTSBDC), which provides no-cost business advising to small business owners and entrepreneurs to start and grow their business in Connecticut.
Q. How has the coronavirus impacted the CTSBDC, including the types of services you provide?
A. With the tremendous need for aid during this pandemic, the CTSBDC has worked with our national partners to ensure our clients have access to all of the federal and state funds that are available.
Through our connection to the U.S. Small Business Administration and other federal entities, and the Connecticut Department of Economic and Community Development, we are making sure that our clients are aware of the financial opportunities, and assisting them through the application process.
Through May we have helped our clients secure more than $28 million in COVID-19-related funding, with $25 million more in the pipeline. Year over year from March 6 to May 31, we have seen an increase of more than 170% in the number of small businesses receiving advice from the CTSBDC.
As the federal aid packages were announced, we received more than 600 new requests for business advising from March to May as businesses looked for eligibility guidance.
Most recently, the advising has shifted to focus on how the funds can be used, how to apply for forgiveness if allowable, and how to pivot and reopen their businesses.
Q. What are the main questions and concerns small businesses have come to you with related to dealing with the state’s economic slowdown? How bad have small businesses been impacted by the pandemic?
A. Businesses have been significantly impacted and those that did not have a six-to-12-month reserve are hurting the most. The questions have been all over the board and have included:
• How to obtain immediate access to emergency funding and forgiveness if applicable.
• Human resources questions relating to unemployment.
• Securing financial stability in six, 12 and 18 months.
• Ways to pivot the business model, operations, including the physical setup, and marketing and sales strategies.
• Supply chain challenges and distribution channels.
Q. What are your top three suggestions for how businesses can cope with the current economic environment?
A. First, keep track of your cash and cash flow.
Next, forecast to the best of your ability how your business will rebound, and use that to create a forward-looking marketing, staffing and budget plan, and track results against that forecast.
Finally, think of all the ways you may be able to serve your existing customer base and even potentially attract new customers within the limits of the restrictions placed on your class of business.
Q. What can companies that have seen a steep drop in revenue do to survive?
A. Businesses must utilize the available aid and scrutinize their cash flow. The Paycheck Protection Program was designed to cover the burden of payroll as it is the biggest cost a business can face.
Companies must also adjust their costs accordingly. Go through every expense line and see where there is flexibility. Making changes to your expense base now may provide the reserve needed when you reopen or ramp-up your business.
Q. What’s been the advice around companies tapping the Paycheck Protection Program?
A. For our advisors, there have been two approaches to consider as it relates to the Paycheck Protection Program.
First, forgiveness is not binary. The loan can be forgiven in portions. And don’t be afraid of turning it into a loan to get you through this very hard time. The worst case scenario is you can use this as an extremely low-interest rate loan.
Over the last two months, helping businesses understand the structure and restrictions of the PPP program has probably taken nearly half our overall time. Because of the forgivable nature of the loan, the majority of businesses have been laser-focused on trying to maximize their forgiveness.
In many cases, however, business owners have started to take their eye off the larger issues in terms of their survival and recovery. For many of them, we’ve been advising not to get so focused on obtaining 100% forgiveness that they make bad short-term decisions that negatively impact their ability to recover and maintain appropriate cash flow and business continuity.
