The times we are living are unprecedented and have proven to be tough for small businesses to stay in business. What can you do to stay afloat during these hard times? Well here are a list of a few tips to keep in mind to help your business through this.
Now more than ever, cash is what is going to keep your business going. You should take a moment to sit down and write out what your expenses are. With everything going on, what you need to take out of your business to pay your personal expenses. Don’t forget to include things you pay once or twice a year. Lastly figure out how much taxes will be due on the income, including payroll taxes on wages that have been paid. DO NOT FORGET your taxes, it can cause long term problems down the road. The point of this exercise is to help you get a handle on how much you need to keep going. Be realistic, look at what your sales look like and think about how long does it take to collect on those sales.
After you’ve gathered what it takes to keep your business going, it might be time to negotiated with your creditors and landlord. If you need to preserver the cash you have to be able to make it through, speak with them. A failed business equals a deeper hole for the creditors and landlords, so they may be willing to negotiate to a middle ground, be creative! The next step would be to look at any contracts or agreements you have signed. Don’t be afraid to ask for help from your business lawyer, they might be able to help find terms or previsions you could use in the negotiation. Before starting negotiations be sure to have all your paperwork in order, to be able to show the creditors and landlord the seriousness of your situation.
My last but not least tip is to consider SBA or other banks loans such as Paycheck Protection Program and Economic Injury Damage Loan. If you already have an accountant, be sure to take the time to speak with them about your eligibility for these loans. A loan could be the lifeline your business needs. Here is a word of warning though, there are many scammers out there, be careful of any emails or online websites offering loans. As far as I know, there are no fees to get you a PPP loan. Talk with your local bank or credit union. They are the most affected by small business failures in their community.