We don’t know when this lockdown will end. It could be weeks or months. In the meantime, your business is taking huge losses. It’s incredible to admit, but we are in the midst of a drastic recession. Almost nobody is buying anymore, nothing is moving, we’re all living day to day, with just the grocery and utility bills on our minds. If you are trying to open a business right now, you need to consider whether to delay and how you can manage the seed funding timing so that you are able to be consistent when you do open your business. Ensuring that you open your business at the right time is one of the most crucial phases of starting up. Is right now the right time? Is it EVER the right time?
Consequently, businesses are having to quickly adjust to new circumstances. As a small business owner, you need to be ready to make the toughest choices. The most numerous challenges will come from the financial side of things. But rather than cut off pieces of your business, how about just doing a little trimming down?
Trimming your supply chain
The very first thing you need to do is exercising the ‘special conditions’ clauses in all your business contracts. Whether you are working with an investor, distributor, importer or financial service, you need to remind them of the clauses in your contracts that protect you. They will be aware of them but it’s vital that you still remind them via email.
Every contract has one or more clauses that allow one or both parties to put things on hold and technically, not live up to the obligations each signed up to meet. It’s also a good time to renegotiate your contract. Your business clients will be more inclined to listen to your demands, now that things have gotten very tough. They may be desperate to hold onto as many clients as they can so see if you can get a better deal that suits your financial burdens.
Keeping sales in check
If you’re one of the lucky businesses that are still selling, even if it’s just a fraction of what you normally would, then you should be using Cloud Accounting. You’re unable to meet accountants in person. Instead of trying to understand their documents sent to you via email, have them utilize the QuickBooks software instead.
You can track sales, watch your automatic bank feed, have all of your data protected via encryption, backup all of your data so you never lose anything and most of all, invite your personal accountant to access the data, so they can add their work to your annual report. It’s important that you don’t fall behind on corporate taxes. You should also use this software to file for tax breaks so you don’t have to pay what you normally would due to the slowdown in business.
Make the tough decisions
More than likely, your employees will have their wages paid for by the government during this tough time. However, that may only be a small rest bite as you will need to make other tough financial decisions. You may need to close down production or close your warehouse storage operations in the meantime. You may also need to lease your office, manufacturing plant and warehouse to any business that is still operating. It’s tough to give these spaces away but you will at least have some income coming in.
Trim down on your finances so you can keep your head above water. Every business will be facing tough decisions but act quickly so your losses are at a minimum.