Crisis Management for Small Business Owners
During this recent period of "shelter in place" orders across the nation, many small business owners have experienced immediate impact in both revenue and day-to-day operations. In an effort to provide financial assistance for these businesses, the government passed several fiscal support packages to be administered through the Small Business Administration. Unfortunately, due to extremely high demand for these grants and loans, many businesses were unable to secure financing. And, of those who have received a loan, some business owners report uncertainty as to the terms and conditions surrounding how to spend the funds.1
As small business owners ourselves, we know that responding to unforeseen events quickly and decisively can make all the difference between surviving and thriving. Here are a few of the the top planning related items we have been discussing for our business and with our business owner clients.
- Determine Your Cash Runway – In times of decreased cash flow it is critical to identify how long your cash in the bank can sustain your current projected expenses. Which means that you must. . .
- Know your numbers - As a business owner it's vital that you know details regarding income, expenses, liabilities, accounts payable and receivable. You should be able to get your hands on the reports you need to confirm exactly where your business stands at any time.
- Identify Critical Expenses & Items to Cut – Next, we advise categorizing the non-negotiable expenses for your business to continue operations. Start with the items that are fixed obligations or those core to the mission of your business and necessary for you to quickly ramp up once restrictions relax. Prioritize items that can be cut so that you can quickly reduce your expenses as revenue decreases.
- Be willing to Negotiate – This can be double-sided. If you run short on cash, contact suppliers, banks, and landlords to discuss terms for payments that cannot be canceled. On the other hand, if you happen to have extra cash on hand, consider negotiating prices and paying for future expenses. This can be a great way to help other businesses while paying for things you will use in the future such as advertising, printed materials, and event venues.
- Solidify relationships with your business support team – Work with your banker, CPA, and payroll provider to expedite your application for financial relief. Now is the to prepare your loan application and gather the needed reports and documentation. Recently unexpected sources such as Intuit and Square have stepped up to help their business customers gather the information needed to expedite financing for the next round of federal loan opportunities. Visit sba.gov for additional lending program information.
We recognize that each business is unique, and strongly encourage you to tap every resource of information and assistance that you have. Feel free to give us a call with any pressing questions that you may have as you navigate the coming weeks.
Creekmur Wealth Advisors may be reached at 866-358-4441 or Info@Creekmurwealth.com.
Citations.
