We’re out of this pandemic. Can your startup handle the next disaster?

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If you’re thinking about starting a business now that the pandemic is over, your business plan might want to spell out what would happen if there was another disaster. That was one piece of advice from panelists at a May 18 Central Penn Business Journal webinar that indicated how much the landscape for startups has changed.

Liz Ackerman, executive director of the Northern Lancaster County Chamber of Commerce, said post-pandemic business plans need what she referred to as “catastrophic clauses.”

“What happens if there is another stretch of time when the business has to be closed for another three to six months and you can’t do business as usual?” she asked.
Ackerman was joined on the panel by Annie Hughes, director of Harrisburg LaunchBox and a management consultant with the Penn State Small Business Development Corporation, and Tammy Clark, vice president and SBA department manager with PeoplesBank. PeoplesBank was the webinar sponsor.

“I think the biggest change right now is our SBA and commercial credit guidelines and how we are actually looking at the credit request,” said Clark.

“If you’ve been heavily reliant on government assistance over the last year, that’s something to be concerned about.”

And Clark had bad news about the Small Business Administration: Not surprisingly, it’s behind on processing applications, especially if you’re relying on a general-processing lender without special lender status.

As the emphasis in the federal Paycheck Protection Program shifts from loan origination to forgiveness, ‘they just don’t have the staff,” she said.

From the perspective of Penn State’s LaunchBox and Innovation Hub Network, which was created specifically to offer resources to entrepreneurs and innovators, Hughes noted an uptick in interest in entrepreneurship and said it didn’t surprise her.

“That’s really consistent with what we’ve seen before in times of economic insecurity,
she said, “like in 2008.”

Hughes recommended that any business plan take into account what’s changed as a result of the pandemic, and what behavioral changes are likely to stick. “People have personal cooking equipment,” she said. “Mental health services had a boom during the pandemic out of necessity.

There are definitely radical changes that we don’t see very often that have happened in consumer behavior.”

All three panelists mentioned the hiring frenzy that has swept southcentral Pennsylvania as COVID restrictions are lifted and business swing back into gear.

“My office is in Camp Hill. I’m not far from the Carlisle Pike,” said Clark, who said she loses count of the number of help wanted signs she sees as she drives from one end of the highway to the other.

Ackerman said she hears the same thing from members of the Northern Lancaster Chamber and described it as a seller’s market for labor.

But Hughes says that doesn’t necessarily put entrepreneurs at a disadvantage in hiring for startups and suggested several nontraditional alternatives to base pay to attract good employees, such as equity profit sharing, deferred bonuses and a willingness to accommodate a different work-life balance. For people with a family, she said, flexibility might be key.

Ackerman mentioned the importance of mentoring before launching a startup, and the presence in Lancaster County of a strong SCORE branch, the nonprofit that offers free business mentoring.

Hughes agreed enthusiastically and said mentors can help you see straight.

“Every entrepreneur is biased towards their own ideas,” she said.

Central Penn Business Journal’s next webinar, Legal Update, is at noon on Tuesday, July 20, and will explore changes in family law, employment law, tax codes and succession planning. Free registration at cpbj.com/webinars