How to Safeguard Your Business During the Covid19 Pandemic
- Cullen Adams | May 7, 2020
Many economists have speculated the current coronavirus outbreak is likely to spark an economic crisis not seen since the Great Depression.
Businesses, both small and large, must be ready to make fast and decisive adjustments to the changing economy.
The economic landscape has changed. Businesses that are quick to adapt will stand the best chance of surviving what will most likely be forever known as the most challenging economic event of our time.
Whether the Covid19 pandemic causes a massive recession or not, the wise business owner should be prepared to make tough decisions and strategically position themselves to weather the impact the virus might have on their business.
Here are some key factors to consider.
1) Acknowledge your current financial position
Any informed decisions made at any time of the business life should first be based on a solid understanding of the business’s current financial status.
Your ability to pay back debt, pay employees, meet existing loan or leasing obligations are all determined by your financial position; in addition to restrictions imposed by the authorities.
Cash flow is vital, particularly if your income has since seen a significant drop. Contact your accountant to discuss all of your available options. Create a plan as to how to mitigate the impact on your company.
2) Explore your eligibility for government assistance
The United States government has announced many stimulus packages to help business owners navigate the impact of coronavirus on their business.
The government is also continuing to scramble to pass legislation to further assist both small and large businesses and individuals adversely impacted.
· Low-interest rate federal disaster loans
· Employer tax credit
· Income tax deferment
Struggling to meet business expenses due to the current pandemic? Help is available. Millions of dollars in funds have been allocated back by the SBA (Small Business Administration).
You can apply for an Economic Injury Disaster Loan to cover expenses such as payroll, suppliers, and fixed debts.
Additionally, the US government is offsetting mandatory paid sick and paid leave costs for employers with an employer tax credit – equal to 100% of the benefits doled out.
An income tax deferment extends the April 15 deadline for businesses affected by a coronavirus, without penalty for 90 days.
This policy provides businesses cash flow from their income tax liability to cover expenses. Please bear in mind that you still must file your business income tax return by the due date.
3) Contact your bank and insurance provider
Your bank and insurance provider may have arranged for loan and payment deferrals for businesses impacted by Covid19.
These packages allow businesses suffering hardship to defer business loans or insurance premiums for up to 6 months.
Check with your provider for more specific details.
4) Communicate with stakeholders
Maintaining transparency for all of your stakeholders about what is happening to your business during this pandemic is critical.
Staff needs to understand your plans and how those plans will impact them personally.
Keep an open dialogue with all of your creditors and try to negotiate payment extensions if and when required. Also, keep communication open with debtors and try and get outstanding amounts paid or negotiate a satisfactory payment plan for them.
Advise customers about how any restrictions will directly affect them. Ensure to communicate as early as possible to minimize the negative impact.
5) Where possible, establish a work from home policy
If you haven’t got a work at home policy or haven’t yet considered one, now is the time. Corporations across the globe are adapting to the changing climate and offering suitable employees the opportunity to forego the office and work from home.
This measure is a great way to flatten the curve and minimize the impact of coronavirus spreading within your organization and causing personnel shortages as a result.
While this strategy may be already in use, many businesses offering staff the option to work from home are doing it for the first time. Obviously, not every business or industry will have the opportunity to implement such policy, or there could be significant, financial burdening barriers, such as additional equipment required.
Try to find solutions to these barriers. If it is at all possible, it’s a worthwhile consideration.
6) Review all overheads
Now is the time to take a look at all of your business expenses and consider making some cuts. Most businesses can significantly reduce discretionary and non-essential overheads.
7) Talk to your landlord
It would be wise to call your landlord and discuss what arrangements can be made regarding your commercial lease, particularly if your business has been significantly impacted or worse, can no longer trade.
8) Build your networks
It’s a great time to reach out to your networks of support for help or advice. Keeping open communications with those in your circle. Open communication is good for your mental well-being as well as the well-being of your business.
Keep talking with your support networks and other small business owners to bounce ideas and create innovative strategies to minimize the negative impact of Covid19 for you and your peers.