The faucet has been shut off. Customers have gone quiet while revenue is not coming in. How do you weather the storm and keep your business from going under?
I owned a conference and event management company during 9-11 and the 2008 Great Recession, when business dropped drastically. Neither of those events comes close to the losses many business owners are experiencing currently with the COVID-19 crisis.
Here are a few steps business owners can take during these trying times:
Communicate with Extended Business Partners
Talk with your banker. If you have a mortgage on a building, discuss the possibility of deferring payments for 2-3 months. Explore increasing your line of credit to ensure you have sufficient funds to pay bills for a few months.
Contact your key vendors to see if you can temporarily stretch your payments to 60-90 days. There also may be an opportunity to re-evaluate your current agreements to determine potential cost savings.
If you rent office space, contact your landlord to see if you can defer rental payments for 2-3 months. If you’ve been a long-time tenant with a spotless record, see if your landlord will waive one month’s rent.
Do a Health Check with Your Monthly Expenses
This is a crucial time to meet with your CFO or bookkeeper and analyze every expense your company has. You will find you probably have a few outdated plans that you no longer use. Monthly subscription services may not be needed and you could temporarily suspend them. The leaner you can be the better.
Time to Pivot
Your current business model has come to a screeching halt; it’s time to get creative. How can you service your existing customers in today’s environment?
My previous conference and event management company has teamed up with a local conference center in offering livestream virtual meetings for their customers. Use technology as you have never used technology. Think of new ways you can safely bring your product or service to your customers.
This is an extremely challenging time for small businesses. As the owner, you will need to bring your employees together electronically to assure them that, as a team, you will get through this.
One thing this crisis has shown us, is how important it is to have a rainy day fund. Once you get through this crisis make sure building a cushion fund is a priority.
Most of all take care of your mental health. Take walks, read books, exercise and spend time with family. Keep in mind history has shown that business flow will return….the faucet will eventually turn back on.
This article was written by Sam Thompson. Sam is the president and owner of Transitions In Business, a Minnesota based M&A firm that specializes in selling healthcare, business to business, transportation, manufacturing, distribution and IT companies. Sam is a Merger and Acquisition Master Intermediary (M&AMI) and a Certified Business Intermediary who has successfully guided countless business owners through the sale or merger of their company. Prior to becoming an intermediary, Sam was a successful CEO and business owner for 29 years before selling his $16 million business.