Small Business Financial Tips for the Coronavirus Outbreak
Financial Tips for the Coronavirus Outbreak
We have watched the novel coronavirus wreak havoc across the world, and now it is doing the same here at home. As small business owners, we need to be financially prepared for the financial impact that a pandemic like COVID-19 can inflict. Let’s go over some financial tips that will help your small business get through this virus outbreak AND to come out stronger on the other side.
Coronavirus Financial Tip #1 – Conserve Cash
Now is the perfect time to review your cash outflow and to look for ways to conserve. Are you paying for subscriptions that you do not need or can temporarily live without? Can you delay a planned large purchase until later? Set spending boundaries to ensure profitability during this uncertain time. Keeping your books up-to-date will help you to know what your expenses are and what you can cut.
Financial Tip #2 – Automate Receivables
If there was ever a time to look at putting a system in place to automate your receivables process, this is it! If your business has a manual process for invoicing and collections process, look at a solution like Biller Genie to make that process a lot simpler. With Biller Genie, you can create a customer portal, accept online payments via credit card or ACH, and automate invoice reminder emails. The quicker you can turn your invoices around, the sooner you will have more cash in the bank!
Coronavirus Financial Tip #3 – Diversify your Revenue Streams
If your business is taking a financial hit because all of your customers are all similar, you should think about how you can diversify. Think about how can you market your products or services to a wider audience? How can you create recurring revenue streams to reduce your reliance on any one stream?
Financial Tip #4 – Look at SBA Funding
President Trump announced on March 12th that the SBA would provide disaster assistance loans to small businesses impacted by Coronavirus (COVID-19). If your business is in a state that has declared an emergency, you may be able to apply for this funding. While normal SBA lending guidelines apply, if you qualify, these loans can be used to cover debts, payroll, accounts payable, etc.
Coronavirus Financial Tip #5 – Plan for Future Emergencies
Saving for emergencies is not a new tip, but one worth repeating. Unfortunately, we cannot see into the future, so it is important to plan for it. If you are not already doing so, reserve part of your revenue as an emergency fund. Being disciplined and building up your emergency fund will allow you to be prepared for the next disaster. At C2 Accounting, we recently implement Profit First into our business and it is changing how we handle our own finances! The book, Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine, teaches entrepreneurs and small business owners to pay themselves first! One of the principles of the book is reserving 50% of your profit as an emergency reserve. Small business CEOs must take control of their business finances, and that includes planning for the future.
One Last Financial Tip – Consider a Small Business Loan
With the PPP program recently coming under fire as the loans disbursed under the original program were made to large, publicly traded companies, considering other small business loan options might be another way to go. Short term loans can help small business owners grow by putting the working capital they need within reach. These loans can be used to cover payroll, fund new equipment or inventory, or invest in new ventures — almost anything that can enable a business to grow and expand, remain operational or boost profits over time.
By implementing some simple financial tips in your small business, your business will be better prepared to get through the coronavirus outbreak. To make sure that your business finances are on track, download our FREE Small Business Financial Checklist today!