Day by day, the real financial impact of the shutdown is sinking in for more Americans. Hardest hit are those who operate a small business. I recognized the early signs of this dramatic impact coming 10 days ago and shifted my tax advisory practice to a small business crisis management practice, drawing on the lessons learned from our long slow years of economic recovery from superstorm Sandy. These ten tips may help:
1. If you have a small business facing cash flow crisis, get your bookkeeping in good order now to be ready for SBA and other crisis programs yet to be announced. Use this to prepare an initial estimate of loss report if appropriate.
2. Understand the impact of the new Small Employers Mandatory Paid Sick Time Law on your business. Don’t be caught by surprise on April 1 when it becomes effective!
3. Understand your future projected cash flow. If you accounting is already in good order, this is an easy and natural output of that work.
4. Now is the time to take a second look at reducing overhead expenses. (I can often help lower common costs like software, accounting, payroll, banking, etc.)
5. Know your major expenses over the next six months.
6. Look into debt and expense deferment programs offered.
7. If you owe money to a small business, pay now. It’s the decent and fair thing to do.
8. If you still have a salary, make purchases from those who do not.
9. Amid the current crisis and shutdown, understand that online scammers have not shut down. In fact they have increased their efforts to take advantage of the likelihood that your guard is down. Don’t be a victim!
10. Get real professional advice. At this time even ordinarily smart people can be led astray or fall victim of faulty strategy and illogical actions. Don’t be among the many small businesses who are contracting me after being misled by something they read on the Internet or heard from your uncle’s barber. Some of the questions I’m getting now from normally smart small business people are insane. We just chalk it up to the stress and misinformation floating around now.
These are just ten generic suggestions. I have many more tested and proven strategies listed from crisis management lessons that can be customized to specific business models. But rather than continue the list here, let’s just offer to discuss the topic in a one-on-one brainstorming discussion.
A crisis like this means ‘temporary insanity’ for small business owners. That is understandable and excusable. But you can and should take immediate steps to minimize the losses, regain your mental fortitude and position yourself for the best chance of faster recovery. Take this time to re-evaluate and strengthen your business strategies, build relationships and prepare to be stronger ahead. The sooner you take bold affirmative action to recognize and address the crisis, the less impact the crisis will have on your business, your finances and your mental health.
At this time I have waived fees for consultations on small business disaster assistance planning. This offer is, of course, limited by human capacity. Just as you and your community is undergoing daily disruptions, my businesses and community are experiencing the same. The immediate goal is to offer as much help to as many small businesses as possible in short free phone or video calls. We help sketch out an action plan; hopefully adding value with some ideas that you had not previously considered. The limitation now is on the available time for this work, but please use the scheduling button on my web site tonynovak.com to connect.
Let’s work together to make the best of the change that’s ahead!