Our community is neck-deep in the COVID-19 pandemic and the economic crisis that comes with it. People are staying home, modifying purchases, redefining work and play, and losing their jobs. Business owners need to make sure that their businesses not only survive this crisis but find ways to thrive once some sense of normalcy returns. Which now, means having cash readily available and making a plan based on various scenarios.
This could include:
•Scenarios surrounding “opening” on various dates. Each potential future “opening” date has an impact on your business strategy going forward. Think about “what does my business look like if ‘opening’ is May 15th, June 1st, or June 30th?”
•If a tourism-based business, what is your belief as to the number of tourists visiting the area this season versus past years?
•What will the customer-facing portion of the business look like? Will it have to change and what modifications will be required?
•What will the back of the house operation of the business look like? Will it have to change?
•What will the workforce look like? Where will the business find help? This is especially important if the business utilizes high school, college, and J-1 Visa students.
•How do I plan on managing cash flow going forward until things are at a “new normal”? Be sure to research the state and federal assistance programs for small businesses. For more information click here.
For our members in the retail space, the following may be helpful:
•Communicate! Open-up a dialogue with your vendors. If you haven’t developed a rapport with your vendors, now is the time to start! These are unprecedented times for all businesses and the idea of working together to develop a “win/win” outcome for both parties should be in everyone’s minds.
•Cancel or put on hold all open shipments. This could be very important as stores may not be able to re-open to the public until mid-May and possibly later. Business, as usual, may not return as early as we all expect.
•Negotiate discounts on shipments received.
•Negotiate extended terms of payments in conjunction with agreed-upon discounts. This could also include partial payments of invoices over a longer period of time
•Put a hold on any future orders, for example, early fall merchandise. This is always a balancing act as no one wants inventory they can’t sell or not enough inventory to sell. Your product mix and selection are critically important.
•Explore new methods of connecting and possibly selling
For more tips on managing cash flow in a crisis, click here.