Covid Financial Survival Strategies for Small Business Owners

One of the rules of business is get funding when you don’t need it. Before the government funding is gone and the banks tighten their wallets in response to the economic impact post-Covid 19, you do want to continue to access as much capital as you can. I expect loans will be harder and harder to access in the coming months and years as we enter our next great depression.

Here are a few priorities small business owners can focus on to stabilize and protect your cash. Normally, you would take each step one at a time. We are not living in normal. You will likely be doing all of these at once. As I write this post, I have all of the below strategies in various stages of “in process”. Do focus on the first FREE money step as THIS MONEY WILL RUN OUT!

Breathe, you’ve got this. You are not alone. We are all in this together.

First, focus on accessing all of the free money you can in the form of forgiveable loans, grants, stimulus checks, and government debt payments. You can read more about those options at https://cpamoms.com/covid-blog-sba-loans-simplified/. This is all about speed to the food bowl. Give up your loyalties to any one bank, don’t worry if it is perfect, and just apply and get as much as you can right now.

There is a high probability that all of the PPP and EIDL funding will be gone by the time you read this post. However, this isn’t a reason to stop. It means it is time to enter the next phase of cash preservation and financial survival.

Second, focus on acquiring as much capital and lines of credit that you can. “Your bank is only as good as your banker”. Based on what is happening now, this statement could not be more true. After the dust settles, small business owners will start to realize how important it is to start and nurture relationships with your bankers. Look locally and build relationship with a Community Bank or Credit Union. They work best with small businesses. There are a TON of options in your local market. I really love the resources from https://www.accion.org. Honestly, at this point, google search your local market, your industry, your gender, anything and everything you think you might qualify for.

Third, you’ll want to start the next strategy to protect your cashflow, which are basic cost cutting measures and cost restructuring to protect you and your business. This is an entire conversation we’ll have another time, but for the moment, look at these two major areas:

• largest monthly costs
• employees and contractors
• fixed versus variable costs

Cut any cost non-essential to your business. Let go of anyone that isn’t performing or essential, we can’t save everyone. I am fiercely loyal, but there is a reason why we are told to “put the mask you yourself first.” If you know you want to keep them long-term, furlough don’t layoff. Turn as many fixed costs (i.e. a cost you pay regardless of any income you earn such as rent or salaries) into variable costs (i.e. a cost you pay only as a percentage of your income such as 100% sales commissioned employees). I’ll say more on this in another post.

Fourth, restructure and renegotiate all of your debt. See a separate blog post outlining our top recommendations: https://cpamoms.com/covid-blog-business-debt-restructuring/