With the current crisis, we have all been thrust into uncharted waters. The past month has confronted businesses with an unprecedented situation—this has literally never happened before—that affects different businesses in different ways. Some are shut down, some are experiencing a slow down in business, and some are busier than ever. If your business is in the first two categories, here is the first step: don’t panic. Take a deep breath. You need to hang in there.
Be prepared for a period of extended stress. Things are going to go wrong, and you should anticipate that. Fortunately, we are all in this together. This isn’t a regional or industry-specific event where other people won’t understand the difficulties you’re experiencing. Everyone is off the reservation at the same time. But that doesn’t mean that your situation is hopeless. In fact, there’s a lot of cause for hope and a lot you can do to improve your circumstances.
So, how do you handle this new and uncharted territory? Here are some suggestions:
Assess Your Situation
Now is a good time to evaluate your overall financial picture. If you are experiencing a slowdown or total closure of your business, you should have some time on your hands. What are your assets and liabilities? Where is money still coming in? Where is it going out?
Take another look at your income projections for the year. Coronavirus may have shot them to hell, so now is a good time to revise them with new circumstances in mind.
Take a hard look at your expenses with an eye to where you might reduce some costs. Proactively cancel things you don’t need—contracts with vendors or subscriptions to services you aren’t using at the moment. You might be able to renegotiate loan payment terms or business insurance premiums (which are usually based on business income). Even some fixed costs, like rent, might be temporarily adjusted during the current emergency.
One good thing about this crisis is that it should be a good time to borrow money. The CARES Act recently passed by Congress includes money set aside for small businesses in the Paycheck Protection Program. Designed to fast track loans that may not need to be repaid, the program will not require the usual documentation for SBA loans. It is administered through 7(a) banks, so contact yours to get on the list.
There is some uncertainty right now if the program will run out of money, but also talk about allocating more funds. So it is worth filing for a loan even if the funding is uncertain at the moment. In addition, the Federal Reserve has slashed interest rates, so now is a great time to borrow money in general. Contact your bank to learn more.
We don’t know what’s coming. This month’s blog about the crisis will be very different than next month’s. One thing I can tell you for sure: the businesses that thrive are the ones that are prepared and agile—the ones that quickly adapt to new circumstances. Now is the time to take stock of your situation and prepare your business to pivot in different directions depending on future developments. You need to be ready when change happens—no matter what that change is.
In addition, I guarantee there will be opportunities created by this crisis. For example, one company that sold haircare products to salons encouraged stylists to make videos and offer discount codes so consumers could buy their products online. I don’t know what the opportunities will be or how they will look in your industry. But watch out for them.
Office Accomplice is here to help. If you need some help figuring out your business’s situation, determining the next steps, or charting a future course, our experts are here for you. Contact us here, and we’ll be in touch.