Small businesses have taken a huge hit during the COVID-19 pandemic and with the state of government stimulus in the air, they need to do what they can themselves to stay afloat. Below are 6 tips every small business can accomplish themselves to keep their doors open until things start to improve. Be sure to contact Mitchell Law Firm at 540-443-9272 for any of your small business needs!
Small businesses struggling to survive are depending on another round of stimulus but Congress is deadlocked. Businesses need to do everything they can, right now, to ensure they will survive, whether they receive stimulus money or not.
Here are some actions businesses should take during these difficult times:
- Budget: Every business owner should know their cash flow for the next 90 days. Use Excel and review your operations’ cash flow daily, weekly, and monthly. The numbers provide an honest assessment of where the business is and what they need to do to make sure they have enough cash.
- Think Worst-Case Scenario: Most business owners are positive “can do” people but when budgeting cash flow, being positive is actually a negative. Assume the worst-case scenario, have a Plan B and even Plan C, and do not count on additional government funding if it becomes available. If it’s one thing we know it’s that we don’t know what is going to happen tomorrow. Be prepared.
- Don’t Wait: Many business owners make the common mistake of waiting until the last minute, or until it is too late to make changes. Don’t wait. Take ACTION. Businesses close due to lack of cash flow, so be proactive in making changes.
- Get Creative: Think outside the box regarding finances. Even in today’s business environment, there are still lenders that are actively lending based on credit score or based on assets such as equipment, real estate, account receivables, and even inventory. Offer discounts to customers –buying more time is worth it. Find where you can leverage what you have.
- Buy Time: The goal for many businesses right now is simply to buy time until things turn around for the business. Think of time as a precious asset that you want to accumulate. You would be amazed at how much you are paying for today that can actually be deferred for weeks, months, or even years. Always ask for more time than you need.
- Communicate: Your stakeholders (employees, landlords, creditors, vendors, etc.) will give you much more than you realize. Many business owners make the mistake of communicating less during bad times when they really need to be in a full-time communications mode. Remove any fear – make it personal and show your stakeholders your passion and fight to see it through. Make them feel like they are a priority and then ask them for help. They already know you are in trouble.
“Traders continue to fixate on whether a stimulus deal of any size will transpire within the next three weeks, even as recent comments from lawmakers have overwhelmingly dampened hopes,” reports Yahoo! Finance. It is clear that small business owners can’t rely on the Federal government to survive the coming weeks. It’s time for every small business owner to take control of the situation. Do everything in your power to steady the ship and navigate to profitability.