It has been nearly sixth months since the COVID-19 pandemic swept the nation and created massive waves for the economy. The current crisis has created significant challenges for small business owners in particular. Even those that were thriving before the pandemic have felt the effects of limitations or sustained closure.
As more and more small business owners wonder how they are going to pay their bills and cover payroll – or stay in business at all – most are having to turn to outside sources of funding. Many are also having to pivot to adhere to health and safety guidelines and still satisfy their customers’ needs and preferences.
To help your business operate as smoothly as possible and position it for success when the crisis has passed, take advantage of the following business planning tips:
- Assess the impact on your business operations
The first and best move is to be honest about the potential outcomes for your business during and after this crisis. What are the best-case scenarios? What are the worst-case scenarios? From there, develop contingency plans that include timeframes. As the situation drags on, it is important to know what steps you need to take three months, six months, even a year from now in the event that this crisis drags on for that long. These are unprecedented times for everyone, so it is critical that you plan for any and all outcomes.
- Be willing to adapt and reconfigure as needed
The businesses that are operating the smoothest (as much as is possible) during this time are the ones that have quickly assessed the situation, were willing to adapt and reconfigure as often as needed. Some small business owners have begun offering curbside pickup options and have launched e-commerce sites. Others have even created new services or products to keep revenue flowing in creative ways and address customers’ current needs and concerns.
- Regularly evaluate your business finances
Under normal circumstances, it can be challenging to effectively manage cash flow. During times like these, is it critical that you frequently evaluate your business finances. To keep your business on the right track, you need to regularly review your accounts receivable, track your cash flow forecast, assess any credit risks, plan for financial impacts and look for ways to reduce non-critical expenditure. As yourself, do you have a sufficient safety net in place that you can draw on? Or do you need to seek additional capital before it becomes a real problem?
- Stay on top of fast-changing lending landscape
As more and more small business owners seek lending to cover expenses, options have begun to dwindle. Where should you turn for business financing? There are both traditional and alternative lending options you should consider:
- The Paycheck Protection Program (PPP) – Need funds to cover payroll costs and other necessary expenses, like rent and utilities? This program works best if you are able to keep your business operating and some of your staff employed. These loans are also forgivable in part or entirely.
- Employee Retention Credit – The Employee Retention Credit equals 50% of qualifying wages paid up to $10,000 per employee. You may qualify if your company was fully or partially suspended by the government due to COVID-19 during a calendar quarter, or if your gross receipts are below 50% of what you earned in a comparable quarter last year.
- Social Security Tax Deferral – If you are struggling with cash flow issues, this option allows you to defer deposits of the employer’s share of Social Security payroll taxes. Or a portion of self-employment taxes if you are self-employed. 50% of the deferred tax payments will be due on Dec. 31, 2021, with the remaining half due Dec. 31, 2022.
- Merchant Cash Advance – You can also turn to an alternative provider like First American Merchant to secure a quick, flexible cash advance. You can have capital in as little as 24 hours, and the set-up process is fast and hassle-free.
Partnering with a reputable, alternative online lender like FirstAmericanMerchant.com can help you secure the safest and cheapest business funds during COVID-19. FAM is an award-winning alternative online lender and processor that specializes in high risk business funding and merchant processing.