Tax & Client Services Director The BaCo Group
Columnist
Share this content
small business owners
iStock_mapodile_smallbix

3 Challenges Small Business Owners Are Facing Now

by

The COVID-19 pandemic has left many small business owners feeling uncertain about the future. While needs vary from industry to industry, many of them are facing the same obstacles. Joe Abesamis, CPA at BaCo Tech, discusses these obstacles and explains how accounting professionals can help.

Jul 12th 2021
Tax & Client Services Director The BaCo Group
Columnist
Share this content

The pandemic has taken a toll on many people, but small businesses are struggling now more than ever. There are a number of challenges small businesses are facing, but CPAs can help, especially in areas like cash flow forecasting. Let’s look at some specific obstacles and solutions you can provide to your clients.

The Small Business Landscape is Changing

The effect of the pandemic on small businesses has varied. Some are facing permanent closure, changes to compensation plans, layoffs and more. Small businesses are changing how they operate to adapt to this “new normal.” As an accountant, you need to be empathetic to their struggles. The good news is despite the difficulties small business owners are experiencing, less than two percent are faced with permanent closure. Your small business clients are flexible and resilient, so your approach to helping them should be as well.

Stress About Cash Flow

In the wake of COVID-19, a lack of cash flow threw small businesses for a loop. Small business owners were faced with the challenge of trying to maintain whatever cash flow they could even as business declined. Accountants can help small businesses navigate this issue by analyzing their current finances and figuring out what cuts would allow them to operate with little to no revenue. CPAs can also work with small business owners to discuss PPP loans and other government programs that can help.

Another issue in response to cash flow concerns is hoarding cash. Small business owners understandably spent less during an uncertain time and accrued more money than they had the year before, which will be recorded as taxable income. Check in with your clients to help them avoid a higher-than-expected tax bill after filing.

The Overall Uncertainty

The biggest challenge most small businesses faced over the past year was uncertainty about the future. Many people thought the pandemic would last only a few weeks or a couple of months at most. Few of us were prepared to deal with the effects of the pandemic for over a year, especially small businesses. This is an opportunity for you to help your clients understand the value of proactive planning throughout the year. It's also an opportunity to develop a relationship with frequent touch points throughout the year. This can help streamline workflow, which will help you prepare for and adapt to the changes that will inevitably occur.

Amid uncertainty, you can provide small business owners with a sense of stability. Form close relationships with your clients so they feel more confident during difficult times. Keep your clients updated on important information to help ease their anxiety. Use technology to engage with them in more consistent and meaningful ways, helping them navigate changes and make wise decisions. Doing what you can to calm your clients’ anxiety will strengthen your relationship. 

The pandemic has been especially hard for small businesses, but accountants can help to ease their stress. Engage with your clients in a meaningful way to determine the best way to help them navigate challenges.

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.