In light of the coronavirus pandemic, I wanted to check in and talk about several financial considerations for you and your business.
As this crisis develops, we’re seeing schools, daycares, restaurants, government offices, and many other businesses and institutions close or restrict their hours. It is becoming clear that all of us will be impacted in some way—we just don’t know how much or for how long. You’re probably wondering how your small business can get through the COVID-19 Pandemic. So it is completely understandable (and, in fact, confirms your nervous system is operating as it should) if you’re feeling a little anxious in this environment.
I’d like to try to help by offering some suggestions (with a financial bent, of course!) to help you re-center yourself through focusing on specific things you can do for your business.
>> Stay Calm.
We don’t know how long the current crisis will last, but we know it will eventually end. When it does, people will still pay for the products and services that they pay for now (whatever it is that your business offers). So the key is to make decisions that are based on realistic expectations—not fear.
>> Increase Your Cash Reserves.
It’s no secret that increasing your supply of available cash will give you more options, especially in a time of crisis. It’s possible that you might be in a position to sustain or even increase your revenue. But chances are, you might be looking at a lower bottom line in the coming months. So on that note, here are two quick ways to increase your cash reserves for the short-term:
1. Defer payment on your 2019 tax bill. The U.S. Treasury Department & the IRS are allowing individuals and most businesses to delay their 2019 tax payment ‘til July 15th (that’s 90 days past when it is generally due) without any interest or penalties. This was created to give you a financial breather. If needed, that cash can help you keep immediately afloat. But, even if you don’t need the cash, I believe many people will feel more financially steady with more money sitting in their savings account for a few more months.
2. Temporarily halt any aggressive debt repayments you’re currently making. Many of my clients have prioritized getting rid of debt (whether that’s a business credit card, student loans, a personal credit card, medical bills…) by allocating a large percentage of their income to pay off the debt more quickly. I’m all for this approach, but, short-term, you may feel more secure with more cash sitting in your bank account (even if it’s ear-marked for the same debt at a later date when things level out a little bit).
>> Consider Your Spending.
If you’re finding yourself with more time, here are two relevant things to consider in relation to spending:
1. Look through the past few months of your bank & credit card statements and re-evaluate if you’re carrying any deadweight expenses (like that software subscription you haven’t logged into for months or the gym membership to the gym you never visit).
2. Pause and think before you buy (both goods and services). Don’t buy because you’re bored, or because you’re feeling anxious. If you choose to spend money, do it intentionally and consciously, and only pay for products or services that will enrich your business or help you with specific tasks.
>> Make the Pitch.
While work-weeks & childcare certainly look different right now, this doesn’t mean people no longer need your business! (And likewise, your need for other businesses’ products and services hasn’t magically disappeared either.)
Many people now have some extra time on their hands… so this may be the perfect time for your clients & customers to focus and invest in what you have to offer.
So ASK. Make the pitch.
Don’t stop asking if they’re ready to move forward. Don’t avoid showing them how you can help.
>> Center Yourself by Reflecting on the Bigger Picture.
In the face of this unknown, we collectively have the opportunity to pause, center ourselves, and reassess things in our lives and businesses that we didn’t have the time or ability to see clearly before.
So, as you take stock, I’d like to offer some ideas to think about in an effort to create more business financial alignment:
- Make a list of all the things you have (including basic needs that are provided for & all base business expenses that you’ve got covered) and take a moment to appreciate them.
- Check if your business financial numbers & reports are easily accessible to you (if not, now is a great time to get QuickBooks Online set up & running).
- Look at your business financial reports—and take some time to figure out what a Profit & Loss, Balance Sheet & Cash Flow Statement actually say about your business’ viability & health. *One caveat, however, don’t use this past week as your financial barometer.
- Learn the profit margin for products & services your business provides. Ask yourself if there are ways that you can increase those margins.
- Determine if you need to change your strategy for both short & long-term business investments in light of the current circumstances. For instance, some short-term investments may now no longer feel right or would create too much financial pressure … Or, maybe you now have more time to focus on an investment you’d put off because you simply needed more time to do it well.
- Consider all the ways you could generate a quick cash influx for your business. Then ask yourself if it feels doable and right to move forward with any of them? If so, take action.
- Ask yourself if you feel good about your business and its overall financial picture. Are there any areas you need more clarity in? Or ways you need more support? If so, start the search to get that help and support.
- Get in a good headspace and ask “What would allow me & my business to emerge better than we were before experiencing the direct & indirect effects of COVID-19?” Just see what rainbows might possibly come out of this flood.
And… that’s a wrap!
I very much hope these financial suggestions for how your business can get through the COVID-19 Pandemic are helpful and bring some peace to your corner of the world. If you found them valuable, please share this post with others. Additionally, if you’d like assistance with your business finances, let’s talk!
PS. Over the next few days, weeks, and months, the Senate, President, IRS, and US Department of Treasury will continue to issue new laws, relief, and specific financial guidelines that affect small businesses. If you’d like to join my email list, I will be dedicated to keeping you informed about what actually applies to you, a U.S. business owner with under 50 employees. For more recent updates, please visit this post about U.S. Tax Return Updates & Additional Financial Resources, as well as this post about the PPP and EIDL Loan options.