Being Proactive with Your Business Amidst the COVID-19 Landscape

Who would have anticipated, outside the movies, a virus would have brought the economy to a screeching halt? As the world faces this health crisis, there is also the ongoing economic crisis from the sudden decrease in the economy. As a business owner, the decisions you make now will significantly affect your ability to weather this crisis until business gets back to normal.

COVID-19 has significantly affected and devastated almost every industry. There are key operational items to consider to help position your business to not only survive, but be proactive to prepare your business for the recovery period.

Overall, you need to focus control what you can control. Don’t worry or waste your time with things you can’t substantially affect.

Here are 7 key items that you can control to positively affect your business’s survival from COVID-19:

  1. Safety: Make sure your employees, your family and you are safe. As we can see in the news, this MUST be taken seriously. You can’t prepare a strategy and execute if you are sick.
  2. Act with Urgency: This is a historical event and unlike anything most of us have seen. You can’t just go with status quo. This is a crisis and you must act decisively and quickly to make changes.
  3. Preserve Cash and Liquidity: Now is the time that cash flow and short-term liquidity is paramount due to anticipated decreased revenue. Protect your cash. Pay what needs to be paid to keep the business open and negotiate extended payment terms with vendors to extend payment terms where possible. Cut expense where possible especially for non-core projects.
  4. Track Your Cash: You need to prepare a 3-6 month incoming and outgoing cash projection. This way you can anticipate cash shortfalls sooner and adjust accordingly.
  5. Staffing and Labor: For many businesses, labor and benefits are one of the largest costs to the business. In light of the reduced workload, you need to make decisions on how much labor is needed and adjust accordingly. This can be done through furloughs, lay-offs, pay reductions, etc. There are programs being launched by federal and state governments to help small and mid-size businesses keep their employees on payroll so you need to be on the look-out for these programs and if you can qualify.
  6. Banking: Reach out to your banker now to assess your borrowing capacity and to make sure you have what you need in place. Your banker also will have information on any loan relief options available along with other loan programs such as SBA programs that may be offered now or as part of future federal legislation.
  7. Taxes: Tax filing and payment dates have been pushed back. There will be additional tax benefits and deferrals designed to help business owners weather this storm. Please be sure to speak with your tax advisor about available programs and credits available.

The best advice to weather the COVID-19 storm is to be decisive and make informed decisions quickly. Resources, legislation and programs designed to help small and mid-sized businesses are being implemented. Please stay informed on these important programs and talk with your trusted advisors. Being proactive with your business amidst the COVID-19 landscape can be exhausting, but together it becomes manageable.

Please see the KatzAbosch COVID-19 resource center for additional news and information at: https://www.katzabosch.com/news/covid-19-resource-center/

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