----> Please read this passage and understand all the main points in it.
Unit 8 : Small-Business Survival Plan for
Dealing with the Coronavirus
These
tips can help guide you and your business during difficult times.
Author, Attorney and CPA
It’s safe to say that this
current crisis is like none other faced by small business owners in the recent
past, and it’s certainly daunting trying to tackle all of the unique issues it
presents. Regrettably, the predominant voice we hear hasn't offered a lot of
specific steps to take or advice on how to save our business, let alone come
out on top.
Below are several issues to
address with detailed considerations and action items that might make the
difference to keep your doors open and calm your employees and customers.
Immediate
financial triage.
The greatest concern for most business
owners, at least initially, is how am I going to pay my bills this week, next
week, and how long will this last. Of course, this is a very difficult question
to answer and moreover, most business owners are facing a reduction of
supplies, capitals or even workers. Here are some important steps to take on
the financial front as soon as possible:
●
Create a cash-flow budget listing with fixed versus variable
costs. Fixed costs will generally keep the doors open and must be paid.
Create a list of priorities about which ones are the most important and try to
set money aside based on the timing of when they are due.
●
Analyse cuts to unnecessary costs that aren’t producing revenue
or securing key business functions.
●
Layoffs, terminations or furloughs of employees. Remember, your
employees can be one of your greatest assets, and if you cut too deep, you may
not get them back.
●
Layoffs are considered to be a
temporary request for an employee to take unpaid time off. These
employees will most likely seek unemployment benefits, but our hope is to
have them back as soon as possible.
●
Furloughs can be a variety of
things and tailored to your situation. It may be that employees work at a
reduced rate, maybe they don’t work at all and stay home, they may be paid a
minimal amount, or might be paid fully at some point in the future.
However, don’t ask employees to work for free — you will probably face
problems for doing so under state law.
●
Terminations are just what they
sound like. You’re letting someone go and they probably won’t be coming back.
They’ll be more than likely seek unemployment benefits as well.
●
Find additional financial sources of revenue. Be creative in
your sales and marketing (more on this below).
●
Consider any savings or resources, including possible loans
(more on this below).
Tax
payments.
Taxpayers have an
unprecedented tax payment extension from the Fed for 90 days, until July 15th.
This is up to individuals and small business owners of up to $1 million in
taxes owed, and up to $10 million for C-Corporations. However, taxpayers
still need to file their taxes or extensions. There are penalties if you
don’t file, but again, no penalties or interest if you don’t pay (for up to 90
days). Taxpayers might also be able to find some extra money by filing
their taxes, because there’s a good chance they could have a refund.
Important note: Don’t fall victim to thinking you can wait to pay
payroll taxes. If you are an employer, those payroll taxes are considered
sacred funds by the government. You’re playing with fire! Payment of
these taxes is not extended and penalties and interest are significant for not
paying payroll taxes.
Disaster
Assistance Loan.
The Federal government through the Small
Business Administration has authorized loans to small business owners of up to
$2 million. These are mean to be used for business debt, covering payroll,
costs to operate the business.
On the face of it, this may seem like a
safe or logical choice. However, remember this is still a loan that has to
be paid back. If your business is already barely getting by, it may not be the
time to do into more debt. Maybe it’s wise to close the doors entirely and
re-open in the future. Taking such drastic action doesn't make you a
failure.
Employees and your talent.
It’s not all about cutting costs with
payroll. It’s important for business owners to show leadership. Set the tone
and be the calm in the storm. You’re riding a wave, you’re on a surfboard.
Don’t complain about the wave or gripe. It’s not going to change. Pay attention
to it though and adapt. Make a plan for the next few weeks, then the next
month. These plans will change, but here are a few specific ideas or steps to
consider with your team:
●
If you have employees, make sure they are assured about being
protected. You want to retain the key people who drive your business. In the
end, it's people who make every business successful so focus on your key
people.
●
Don’t get stuck in decisions you made last week. Be willing to
adapt and have new plans. You are going to have to live with these changes once
the crisis is over.
●
Stop hiring unless there is a candidate you’ve been trying to
recruit and don’t want to lose. Communicate with them.
Unfortunately, hard decisions will need
to be made. Make a talent assessment in your company on who is valuable and how
your business will be different if this person isn’t working for you next
week.
Marketing
and sales.
Make sure to communicate clearly and
consistently with your customers. If you are open for business, make
sure they know that and how to interact with your organization. Make it
easy for them to purchase your product and services.
Use your social media presence to keep
your customers up to date. If you typically don’t use social media, it may now
be time to build one.
Be creative and find new
opportunities to market and sell. Given the current conditions, what resonates
with customers right now that you can provide? This is a good time to focus on
your existing customers, provide excellent service, make sure you retain your
important relationships and customers. Let any key relationships know you are
still there and how you can be of service.
Finally, consider new ways to
deliver your service or product. It may be through home delivery, mail or virtual web-based services. Offer discounts
if necessary and think outside the box.
Operations, research and development, product or service
improvements.
If things are slow, this is an ideal time
to tackle those projects you have been putting off. Invest in this time, don’t
waste it on Netflix or getting sucked into the never-ending news coverage.
Instead, consider this time for you or your team to be invested in improving
products, services and finding efficiencies.
If you or your team have more time
available (because you have less work or fewer customers), use this time to
improve your processes and efficiencies, improve products and services or make
the changes you’ve been meaning to do over the past few years or months. We
know we all have them in our business, and we’ve been too busy to get to them.
Well, use this time now. Come out of the storm stronger and have a better
product or service.
Conduct training in your company or get
training yourself as a leader in areas you know will improve your company. If
you know you are weak on social media marketing, or accounting and budgeting,
IT, or a niche thing in your business category that could drive your business,
invest your time into this. Get your team doing the same.
Assess your
business's 2020 strategic plan.
If you didn’t make a
Strategic Plan for this year, it’s certainly time to make one now. This is a
great time to make modifications. Start on projects that have been on your
wish list and revaluate your objectives for the year. Adjust the plan and
outlook for 2020 as you know more about your business.
You’re going to have weeks or months
dealing with this mess. Are you going to use the time wisely or waste it?
Be
charitable, show humanity and note what you are learning from this.
We are all learning a lot about how we
could have better prepared for this disaster. Use this time as a wakeup
call and learn from this experience. Start taking notes and don’t return
to the status quo when this is all over.
●
Have a financial reserve or savings account for your business
that could help in times of need or disaster.
●
Have a personal financial reserve of a few months of living
costs.
●
Build a small food storage at the least. Maybe a few months'
worth of household goods, such as toilet paper, soap, feminine products,
laundry soap, etc. Do your best with the resources and space you may have.
●
Consider new revenue sources and small diversifying your
business.
Finally, try to serve and help those in
your community. The more you help others worse off than you, the better
you’ll feel. As even a short history of the United States has shown, this too
will pass and we should do all we can to help one another through it while
we all learn and grow from this trial.
---> Read the article and identify if these statements are true
(T) or false (F).
1.
During MCO, the greatest concern for most
business owners is to settle all bills, payments and how long this situation
will last.
2.
It is trivial to set money aside after creating
a list of priorities regarding payment due.
3.
Business owners can ask their workers to work
for free for a short period of time.
4.
There will be no penalties or interest if
business owners do not pay their taxes for up to 90 days.
5.
Payroll taxes will not be extended and
employers are not allowed to delay the payroll taxes.
6.
It is a wise decision to take loans during this
pandemic spread to save one’s own business.
7.
Key people are the success in every business.
It is important for employers to secure their jobs.
8.
Business owners must be willing to change their
plans according to the current situation in order to keep their business
running.
9.
Business owners are encouraged to have social media presence to
keep your customers up to date.
10. This is an ideal time to tackle delayed projects or business
plans.
11. It is suggested that the company should be getting sufficient
training for employers and employees to improve the inefficiency in the
organisation during this time.
12. Now is the best time for business owners to make strategic plans
13. Having a financial reserve or savings account for your business
is insignificant as government will help in providing financial aid that could
help in times of need or disaster.
14. There is nothing much to learn on how we could have better
prepared for this disaster as a lot of people are affected by the Movement
Control Order.
15. Helping others is not an option because employers can barely
keep up with a lot of payments
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