It’s no secret that the rapid spread of the novel coronavirus has created significant challenges for businesses large and small. Almost every business entity has been impacted on some level, whether due to federal and local mandates, or even a positive diagnosis of COVID-19 within the organization.
Small businesses, however, may be particularly affected by this crisis, largely because of the amount of cash that is flowing—or not flowing—into their accounts. This is causing major uncertainty as to the financial wellbeing of small businesses, their owners and their employees.
Although nobody knows for certain what will happen next, there are steps every small business owner may consider now to prepare for what’s ahead. Evaluate these three steps as you develop a strategy to maintain control over as much of your business’s future as possible.
1. Communicate, communicate, communicate: Above all else, communication is critical during this period of uncertainty. Make sure you’re implementing consistent and transparent communication with all critical aspects of your organization—particularly your employees, your customers, and your financial partners.
2. Conserve Cash: Financial control is paramount during this time of economic uncertainty. Find ways to maximize or preserve your cash flow and reduce operating expenses so your business can meet obligations that you can’t defer even if receivables are down.
Take a look at where every penny from your business is going. Are there any cash leaks? If you can identify every expense, determine which costs are needed and which are not for running your business. Can you do virtual client meetings instead of in-person appointments over lunch? Is there a way to minimize supply expenses? Every penny counts right now, so don’t spend on unnecessary extras.
3. Revise your 2020 forecasts and budget: You probably prepared for 2020 with a budget and sales forecasts based on last year’s numbers. Of course, nobody could have predicted a global health crisis, so you may consider adjusting those numbers to reflect your new opportunities and challenges.