10 Tips to Stay in Business During the COVID-19 Pandemicby
Many business owners, including accounting professionals, are concerned about their survival during the COVID-19 pandemic. Here are 10 tips from guru Bryce Sanders to help companies stay afloat.
These are extraordinary times. Many businesses have been closed because they are considered non-essential during the Coronavirus pandemic. For business owners, many who have been struggling before the lockdown, this can bring up the question of survival. This could apply to your clients or to yourself, if you have your own firm.
Here’s the challenge when it applies to your clients: Many small business owners consider accounting a necessary evil. The “Big Four” firms have one foot planted in business accounting and the other in business advisory/consulting. After the business owner, you likely understand the company best. You see their operation, their industry and their geographic environment. Helping them through this difficult period could lead to a greater consulting relationship in the future.
So, what should small business owners do during the Coronavirus pandemic? Many of the best strategies are good business sense in normal times, yet they are far more important today. Here are some steps to take:
- Reduce Expenses: This is obvious, but it bears mentioning. If there were capital spending plans, can they be put on hold temporarily? Can you reduce orders for new stock or defer delivery? Can you return stock that hasn’t been sold?
- Increase Revenue: Despite the crisis, some businesses are coping. Restaurants aren’t allowed to offer table service, but takeout and home delivery are helping supplement their revenue. You can buy a new car online and have it delivered to your driveway. You can order replacement windows by taking pictures of your home, e-mailing them and getting a quote. Now is the perfect time to look into these or similar options. If you were planning on developing the online side of your business, put energy into that task.
- Collect Past-Due Bills: Businesses often delay paying their own bills while focusing on money owed to them. People and businesses want to maintain good credit ratings. Don’t let follow-up on accounts receivable slip.
- Rely on Credit Lines: Why did you counsel your client to set them up, pay them down and generally be a good banking customer? Because the cash flow at many businesses is often irregular. Money may be tight, but that’s what the credit line is for. Interest rates are at historically low levels. Just remember the bank will want their money back.
- Negotiate with Suppliers: They know everyone is having problems. They would rather get some money than none. If there are serious cash flow problems, talk with your vendors. You'll find a surprising number are flexible, since they want to keep their clients.
- Look to the Government for Help: You’ve heard about the stimulus package. Does your business qualify for low-interest-rate loans? What does it take to qualify? Is your state or county offering help on the local level? Are they allowing businesses to defer tax payments?
- Look After Employees: Layoffs should be a last resort, but the restaurant and hospitality industries have been particularly hard hit. Marriott International announced the Chairman and President will be forgoing salaries, and senior management is taking a 50 percent pay cut. See what you can do to keep your staff afloat as well as your business. For instance, perhaps you could arrange for reduced hours. Here's another idea: In our area, a local restaurant e-mailed their customers, asking them to send in tip money to be distributed among the staff.
- Convert Production: Everyone talks about the shortage of face masks, hand sanitizer, hospital gowns, ventilators and other critical supplies. What else is needed? Can your firm shift production to these areas?
- Buying (from) Competitors: Your firm might be in better shape than others. If a competitor is closing up shop completely, you might want to consider buying their inventory. Depending on your industry, you might be able to expand.
- Plan for the Aftermath: There will be pent-up demand when the Coronavirus pandemic is history. It’s fair to say a lot of babies might be born in nine months. People who deferred vacations will rebook. People will resume plans to buy cars, do home renovations and go shopping. How will you prepare for the resurgence? Why should they consider buying from you first?
Mix and match these tips as you see fit for your clients (or yourself). Be sure to plan for the current crisis and the future.
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.