COVID-19 has presented a unique set of challenges from both a health perspective and financial perspective for small business. As companies prepare for several more weeks of business interruption, here are some steps you can take now to navigate the crisis.
Evaluate your financial statements
- Review each expense line item on your profit and loss statement:
- What expenses can I control?
- Can they be cut back?
- Is the expense essential for the next three months operations?
- Is there a monthly payment option for items that have typically been annually prepaid, such as insurance? Also, check with your insurance agent or attorney to see if your policies cover business interruption or peril losses.
- Review your balance sheet and determine where there may be hidden cash:
- Can current assets like receivables or inventory be discounted to help immediate cash flow needs?
- Can long term assets be utilized in another way to generate cash?
- Will your vendors work with you to restructure or lengthen accounts payable terms?
- Will your banker restructure debt to lower monthly payments, such as extending amortization periods or reducing interest rates? Are short-term lending options available to manage current cash needs?
The Small Business Administration (SBA) is also offering disaster assistance loans to businesses in need. SBA Disaster Assistance in Response to the Coronavirus. The Missouri State Emergency Management Agency is currently working to get Missouri added to the list of eligible states.
Stay connected with your customers
What does your customer base look like? If you have a few large customers, the loss of business from one can be a big risk. Be proactive and reach out to customers to make plans to work through this crisis together. Priorities that they had before the crisis could be shifting by the day. Maintain contact to focus on what is needed for the customer in the short term and shift work as necessary.
If you have many small customers, get creative with social media and video to keep them engaged. They may not be using your business now but keep them involved with your brand, so they come back when things return to normal.
Be proactive with employees
Employee morale is a significant concern for many businesses that face furloughs or layoffs. Face-to-face meetings can be critical in times like this but are not possible with the social distancing guidelines, so leverage technology to keep that connection. There are paid options, with more features, such as Microsoft Teams, Slack, GoToMeeting, and Zoom. If you need something quick and easy, Apple’s FaceTime or Google’s Duo are free options. No matter what tool you choose, keep employees informed and help them feel valued as part of the process as critical business decisions are made. Also give them opportunities to ask questions and share concerns. Several programs employees and employers need to be aware of include:
- Families First Coronavirus Response Act
- MO Department of Labor Shared Work
- MO Department of Labor Coronavirus Information
- KS Department of Labor Shared Work
- KS Department of Labor COVID-19 Response Resources
Lastly, continue to plan for the unexpected. Your business may not have been impacted by COVID-19 yet, but it will. Consider potential business interruptions that could occur with customers, suppliers, and employees and have a response ready. To go further, if you can gain a better understanding of the response plan for your key business partners, you can better plan the impact on your business.
Contact us if you have any questions about business strategies.