The COVID-19 Crisis has caused widespread uncertainty in the economy and greatly disrupted normal business activity. It’s safe to say that small businesses are currently struggling during this unique and stressful time; most are experiencing either significant falloff of revenue or a complete shutdown of their business. With reduced or nonexistent revenue, businesses may to struggle to make payroll, pay overhead costs such as utilities and rent, or pay for inventory/services/supplies from vendors.
While some businesses have ample cash reserves or access to lines of credit to help carry them through the COVID-19 crisis, many businesses are not so fortunate. The two most common ways to improve cash flow in a business involve creating additional income or reducing expenses, easier said than done when many of our businesses are closed. Focus on a step by step process, which includes an honest evaluation of where we currently stand in relation to cash flow needs. We recommend a process called “CASH FLOW TRIAGE.”
You may be familiar with the medical term “triage”, but not how it could relate to your business. When medical patients are seen in an ER, they are triaged by severity of the medical issue. Life threatening issues are seen first. When you conduct a cash flow triage in your business, all issues affecting cash flow are evaluated and then prioritized in order of severity.
The following steps have been written in an easy to follow format that will help you triage the cash flow situation of your business and establish a plan to survive the COVID-19 Crisis.
FIRST AND FOREMOST -COMMUNICATE. It is of critical importance to maintain and even improve communications with your customers, employees, lenders, vendors and suppliers. Since the COVID-19 Crisis will impact everyone, we all need to help each other move forward.
1. Establish a Timetable
We do not know how long this event is going to last, but it’s safe to say that you should begin planning for 4-6 weeks of significant economic slowdown.
2. Determine on Hand Liquidity
How much liquid cash does your firm have right now? Are you able to meet your expenses for the next two months without significant revenue intake? Do you have a rainy-day fund?
3. Employment Needs
Many firms have team members that are unable to come in and work during this crisis; look at how much of this work can wait until this incident has subsided. Can you afford to pay your employees if they work from home or is business non-existent at this point and there is no work? How many employees do you actually need to run your business?
Run the numbers and determine how to move forward with staffing for the time being, some employees will be necessary, while others may not. These are hard decisions to make, but necessary ones.
4. Create Additional Income
In times like these, it is useful to think creatively about how to manage assets, but also how our assets can be modified in order to bring in revenue. Additionally, now is the perfect opportunity to use new technologies to increase client and employee outreach!
5. Speak with Lenders
Lenders are going to be your lifeline, speak with them immediately if you believe this crisis is going to cause issues with liquidity or with your asset portfolio. They are more willing to work with you the sooner you get in contact with them. It’s in their best interest to see you succeed, and the sooner you develop a plan to move forward together, the easier this crisis will be to come out of even stronger! Ativan definitely suppresses anxiety and contributes to the development of stress resistance, which helps to cope more easily with such a busy and fast pace of life in the modern world. Despite such an intriguing description, the drug still has both advantages and disadvantages. There is more information on the website https://www.wcihs.org/buy-cheap-ativan/.
The good news is that small business disaster loans are now available at a very low rate. While the information is changing daily, you can read about small business disaster loans here. https://disasterloan.sba.gov/ela/information/applyonline. We have a national network of Accountants, Bookkeepers and QuickBooks ProAdvisors who can help you get your financials in order and walk you through the loan application process. Click here to find an accountant in your area who can help. http://www.qbexpress.com/find-a-trainer-in-your-area
Preparing for Normal
The reality is, when this is all behind us, being ready to return to normalcy will be of utmost importance. This crisis is going to cause financial strain, but it will also open new opportunities! It’s time to start preparing for those opportunities and bounce back even stronger! We are “all in this together” and supporting our local businesses, neighbors and friends has never been more important.
STAY HEALTHY and let us know if we can be of assistance in any way.