The global Coronavirus (COVID-19) pandemic has touched each of us in ways that we, as Americans, could scarcely have imagined just a couple short months ago. As we work from makeshift home offices, watch business revenue slow to a trickle and, in some cases, lay off valued employees, it’s important to take the long view and put strategies in place to survive this unprecedented economic disruption.

Below are nine tips to help you assess your business’s current financial condition and start rethinking your business plan to come out on the other side of the COVID-19 crisis with your business intact:

  1. Examine your monthly income and expenses. Have you been meeting your budget? How much of a drop in revenues can your business withstand, and for how long?
  2. Rebuild your business forecast for the next six to 12 months. Consider the business impacts of the virus on your marketplace. How are your buyers impacted? Has buying slowed? Have payments slowed? Do you have COGS and a supply chain you need to fund?
  3. Come up with plans to respond to a three-month decline and a six-month decline in revenues. Build monthly and even weekly cash forecasts. Be realistic. No one knows exactly how long this will last, and depending on the type of business you have, your recovery may be slow as supply chains ramp back up.
  4. Refocus on your balance sheet and how much credit you are extending to your customers. No one wants to make payment demands right now, but if you have customers who are more than 60 days late, a phone call would be in order.
  5. Check with your lenders on the status of your credit lines. Are you in compliance with their terms? Will your bank allow you to defer loan payments until the crisis is over?
  6. Communicate immediately with creditors about revising payment terms. They will be grateful to hear from you. Forfeiting early pay discounts may be more advantageous in preserving cash that is needed right now.
  7. Look into alternative types of financing, possibly including loans on life insurance policies, loans from state and local development agencies, or the U.S. Small Business Administration (SBA). Since the COVID-19 crisis, the government now has financial relief options in place. Review what is available and see if it applies to your business.
  8. Contact your quality customers and let them know you are there for them. If your business has stopped altogether during the COVID-19 crisis, let your customers know how much you value their business and that you will be up and running again as soon as it is practical. Find out what their concerns are and how you might offer assistance.
  9. Communicate with staff about the need to tighten spending and invite their ideas. If you have had to lay off workers, stay in contact with them and let them know you want them back when the crisis is past. It will be easier to ramp up operations again with employees who are trained and know your business than to have to hire new workers.

Above all, focus on your strengths and remember that you are not going through this alone. Please contact us if you have any questions or concerns.

2023_IPA 300