This time of the COVID-19 pandemic is traumatic and frightening for many millions of people, especially for small businesses. We don’t know how long the reduction of work will go on. How can you, as a small business owner, keep your business afloat and make it to the other side of this crisis?
At CE Thorne CPA, our focus is small businesses. We make it our mission to be a partner with you in the success of your business. In this regard, we’ve put together 9 tips that will help you as you navigate these turbulent times so that you can stay in business and be ready to thrive after the climate settles.
Look at your most immediate needs on a daily or weekly basis.
Look at your cash flow statement to see what is coming in and going out. Test different scenarios for the coming months. Look for ways to reduce costs wherever possible.
After assessing your finances, if you decide that you need more money, especially to pay employees and keep them employed or pay rent, the best place to start is with the Small Business Administration. Their website for guidance to small businesses during COVID-19 is a good resource.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a program enacted in late March 2020 that provides business loans, debt forgiveness and emergency grants to help small businesses during the pandemic.
The CARES Act includes several tax relief provisions that can significantly cut your tax liability. For example, you may be able to delay estimated tax payments and employer payroll tax payments. You may be able to get tax credits for employee retention. You may be able to access the changes for tax treatment of net operating losses, AMT tax credits, and business interest deductions. Consult your tax advisor to determine how you may be able to benefit from these changes and conserve cash.
Contact your customers and do what you can to get paid faster. Can your customers and clients accelerate payments?
We know this is a tough situation because your customers have been slammed by this crisis, but you should still have the conversations. Some may be able to help. Also, see if you can defer paying your bills. Contact your lenders, suppliers, vendors, landlord, mortgage company and credit card companies to let them know your situation. You can find out what arrangements can be made to defer, reduce or forgive payments.
Now is a good time to consider making your business more efficient. Efficiency is critically important now more than ever. Trimming fat where you can will put you in good stead for remaining in business and being more competitive. The key is running leaner without sacrificing quality. Most businesses run with some excesses. Study where your business is spending money now and consider any expenses that can be eliminated. Expenses you could consider reducing during the crisis might be rent and excess marketing.
The pandemic is going to change market trends for the foreseeable future and possibly long-term. Spend time understanding the landscape of your market and reposition if necessary.
Can your business provide its product or services more remotely? Is a brand redefinition called for?
Previously your business may have been just in-person, whereas in the future it could capitalize on sales from both in-person and online.
From personal trainers and yoga instructors offering online classes to retailers moving more into ecommerce, there are many ways to modify your business model to survive during this crisis. Now is the time to make these adjustments so you might have an entirely new revenue stream when the quarantine restrictions are lifted.
It’s so important to reach out to your customers right now. Show that you care and that you’re staying in touch with them. You can do this through email, through your website, and via social media. Be creative with chat groups or live streaming, if appropriate for your business. You can share information that helps customers with difficulties they are experiencing and form a deeper connection that people will appreciate. This helps you and them.
Spend time looking at your competition to see what they are doing and what you can learn from them. Some businesses are suffering more than others. What are the ones who are making it through the crisis more smoothly doing differently? What are those businesses doing that is working more effectively?
This is a constantly changing environment so you need to keep informed on a daily basis of your state and local government’s restrictions and guidelines for coming out of the quarantine. Be sure you are knowledgeable about what you can and can’t do as we adjust to easing out of the shelter-in-place restrictions.
Stay positive. The pandemic will end and, when it does, following these tips will put you in a better position to hit the ground running and thrive because of the lessons you’ve learned and the processes you have put in place.
Look at CE Thorne as your trusted partner in not only keeping your business afloat but also positioning yourself to be even more successful after COVID-19. Please call us at 919-420-0092 to talk about your business and how we can help you weather this crisis!