“We are all in this together!” How many times have you heard that statement in the past few weeks? In many ways this is true. We have seen so many people, communities and industries ban together for a brighter future. But, as a small business owner, you may be feeling like you are living on an island. You have a lot of responsibilities and tough decisions to make. Not many people can relate to the weight that you have to carry. For many of you, today is not about thriving (that will come later), it is about survival. Your survival is dependent on connecting with others, making smart decisions and gracefully executing. A balancing act, if you will. The key component to all of your survival decisions is your financial foundation.
Below are a few ideas to help you to make sure that you are in a solid financial position so you can survive today and thrive in the future.
1) Know Your Financial Position
First things, first. It is vital to the survival of your business to know exactly where your business stands financially. Get together with your CPA to evaluate the financial strength of your business. Going forward, evaluate your budget, P&L, and Balance Sheet bi-weekly (if not more) and make appropriate adjustments.
2) Stick to a Budget
Assess your expenses, are they all necessary? We all get busy and intend to call to negotiate, cancel, or find an alternative. Get down to the bare necessities. You are planning for the long haul, don’t waste limited funds on bills that won’t provide you value.
3) Your Cash Flow
Make sure you separate business and personal costs. During high-stress times, it can be easy to mix up charges and spend limited business funds on the wrong items (which you will have to untangle come tax time.) Watch incoming and outgoing trends closely to avoid a negative cash flow snowball.
4) Apply For Grants/Loans
There are many local grants/relief funds as well as loan options from the SBA. Many have rules to qualify for tax credits, be sure to discuss with your CPA or SBA Loan Officer to ensure you are meeting these and maximizing tax savings opportunities.
Some of your options are the EIDL loan program, PPP loan program, private grants, and public grants. Check with your local Small Business Development Center or Chamber of Commerce for options available in your local area.
For more information on the EIDL and the PPP programs, check out our blog here: http://www.brwtax.com/post/2020/03/21/know-your-options-sba-disaster-relief-loan
5) Adapt to the Needs of Your Consumers
Ask your clients how you can support them! Given the opportunity, they want to help you succeed and are willing to give you feedback. You can ask them what they need from you on social media, through a personal phone call, or bring up questions in casual conversation. Please keep in mind that everyone is drowning in surveys. If you send out a survey, it is likely that you will not receive many responses.
Also, ask your employees for their ideas. Your employees are on the front lines of your business and are seeing things that you don’t see. They know your business and your customers best and can be a wonderful source of fresh ideas. Like your clients, they want you to succeed… and they are excited to be apart of it.
Also watch your competition. What are they doing? How are they adapting? You can watch them on social media, their website, or listen to what the market is saying.
To get the ideas flowing, here are a few adaptations that we have seen:
- Take your product/service online
- Make into an activity for families
- Hold online classes through Facebook or Zoom
- Create complimentary products
- Partner and collaborate with other businesses (maybe even your competition!)
- Offer temporary discounts
- Continue to provide value to your customers
How have you adapted your services? We would love to hear from you! Post on our Facebook page HERE
6) Get Help Paying Your Bills
Create a contact list for all bills, expenses, and resources. Call your landlord, utility company, suppliers, and vendors to negotiate. Add payments to the end of leases and ask if penalties, late fees and interest can be waived. Use the magic words “I have lost income due to Covid-19.” Many entities have protocols based on language from customer requests.
7) Maximize Tax Savings Opportunities
Work with your CPA/Accountant (WARNING: Shameful Plug Announcement-We highly recommend BRW Tax & Accounting) to ensure you are gathering documentation and meeting requirements to qualify for tax savings for next year. Given the estimated time for recovery, every penny is going to help keep your business afloat (AND hopefully profitable).
8) Talk to Your Insurance
Do you have business interruption insurance? If you do not know the answer to this question, hop on the phone with your broker and ask. Business Interruption insurance is typically added to property insurance and tied to a brick-and-mortar location. It would pay your bills based on the profit you would have made. If you do have business interruption coverage, it is likely that your agent will tell you that Covid-19 is not covered under this policy. Advocate for yourself and have your broker file a claim anyway. If you receive a declination, dispute it.
Take this opportunity to review your current policies with your insurance broker to ensure that you have the correct policies in place going forward.
9) Retain Your Workforce
Your employees are your biggest asset that you have invested a lot in. Time, money, training. SHRM (Society for Human Resource Management) estimates that the average cost of hiring is $4,425 per employee. Retaining your workforce will pay off when the dust settles, and you are ready to jump back in.
Keep lines of communication open
Communicate expectations and plans for the business so they can support the flexibility needed to survive. If your workforce is remote, stay in contact to address absenteeism, sick leave, productivity as soon as possible.
Provide updates/plans for return
Keep your team apprised of updates and changes. They are full of uncertainty as much as you are, regular updates/feedback will help them feel calmer, squash gossip and decrease your chances of turnover.
Show appreciation
Now is the best time to show your employees why they love working for you! A simple “thank you” goes a long way. Keeping in mind that finances are tight, there are some low-cost options to let them know that their hard work and adaptation is recognized. Worst case scenario, plan something special for your employees when you are able to return to “normal” operations.
Invest in development
Most employees look for and value employers that help them grow. What training could they be focusing on that will be valuable when operations ramp back up?
· Professional training
· Audible
· Online classes
· Skills advancement/cross training between employees
Did you know that many local libraries offer FREE e-learning platforms? Call your local library and see what they have to offer. This is a great time to identify skills that your employees can sharpen and develop for free.
10) Create A Disaster Plan
Facebook reports 75% of small businesses without a disaster plan will fail within 3 years after a disaster. Do you have a disaster plan in place? If not, we recommend that you start working on a disaster plan now. Yes, we are in the middle of a disaster. But, now is better than never. Our sister company, HR Branches, has created a helpful Disaster Plan Template to guide you through the planning process.
Download your FREE HR Branches Disaster Plan Template HERE: https://www.hrbranches.com/blog/disasterplan
As a small business owner, you have a lot on your plate. You have the responsibility of keeping your business in operation, your employees employed and your obligations met. That is a lot. The above tips have been designed to help you identify the important stuff. Figure out what is most important to you and the survival of your business and get to work. Of course, if you have any questions, please reach out to us. We are here to help in any way that we can. BRW Tax & Accounting is offering free 30 minute consults to any small business owner who could use a little help during this difficult time- no strings attached.