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Rebuilding Your Business After COVID-19 : Part 2 of 2

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By Debbie Gregory.

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The current COVID-19 pandemic has been raging all over the world since late 2019 and almost every small business has suffered various types of negative financial effects. Having a keen understanding of exactly how much your business has suffered, as well as having a solid plan in place, will dramatically help your business get back on track during this pandemic and hopefully after the danger has passed.

In Part one of this mini-series we covered some ways you can prepare your business.  This part will continue to provide you a few more things you can do right now to prepare your business for a post-COVID-19 world.  VAMBOA, the Veterans and Military Business Owners Association wishes you great success and prosperity.

 

4.) Time to Revise Your Budget:

To place your business back on its feet, you may need to invest a significant amount of money and/or resources to make money.   You may need to launch new ad campaigns as well as invest in new marketing materials and collateral.  You may also need to determine if you need new inventory as well as there might be new and improved   equipment that you need to buy.  You may also to hire or rehire employees with additional skills such as eCommerce expertise.  You must have a clear vision of   how much you need to get your business rolling on a day-to-day basis.   It is a reasonable assumption that your pre-COVID-19 budget is no longer applicable, and you need to tweak it for this “new normal”.

 

5.) Put Together a Re-Build Timeline:  

It will take hard work and energy to get your business back following the pandemic and doing everything all at once is not very realistic. Putting together a timeline that prioritizes your most important actions will help you reach each of your re-opening goals in an easier and quicker manner. For example, you may want to start by securing a loan, then rehiring your employees, then restocking inventory, etc. Also, make sure to track your progress each step of the way.   Having a timeline and plan in place will keep you organized.

 

6.)  BE PREPARED!  Put Together A Plan Now for the Next Crisis:

Though this pandemic seems like a once-in-a-lifetime event, the reality is that an emergency of this nature may well happen again and again.   For example, we are seeing a resurgence in hot spots and COVID 19 cases in areas that may have re-opened too soon and may have to close before they can again reopen. Use what you have learned during this pandemic to put together a comprehensive plan to help you insulate your business from future shocks and downturns.

You may want to:

  • Build up liquid cash savings
  • Pay down or pay off any debts
  • Trim your nonessential spending
  • Find ways to help your staff work more efficiently
  • Cut operating costs

 

The more you can prepare now, the better off you will be once the pandemic has passed. Having at least one plan in place will greatly improve your odds of surviving now during these tough financial times and eventually thriving again more quickly and more efficiently.

 

Rebuilding Your Business After COVID-19 : Part 1 of 2

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By Debbie Gregory.

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Unless you have been living under a rock or in seclusion, you understand the COVID-19 pandemic has ground many businesses to a halt and wreaked financial havoc all over the world. Many businesses are continuing to struggle as the pandemic continues to rage months after it first began. According to a recent study by the National Federation of Independent Business (NFIB), as of March 30, 2020 approximately 92% of small businesses that responded said they were suffering negative financial impacts as a result of the pandemic. Only 5% said they have experienced no effects at all.

A plan can dramatically help your business get back on track once the danger has passed. The short-term outlook for businesses varies widely depending on your industry.   No one knows what the “new normal” will be and we can only make guesses at how the overall economy will look. There are a few things you can do right now to prepare your business for a post-COVID-19 world.  They include the following:

 

1.) Assess the Overall Financial Damage to Your Business:

Before you can start planning how you will recover, you need to know exactly how your business has been impacted.  Now is the time to collect all of the numbers (from places such as profit and loss or cash flow statements) in order to compare them to previous years and determine just how much it has affected you. Next you will need to take a close look at how at what other parts of your business have been impacted including if you had to lay off workers, you were forced to greatly reduce marketing budgets or it became necessary to have workers perform their jobs remotely from in home offices.

 

2.) Will you Need Funding to Recover?

Your business may need a fresh infusion of cash to get back on its feet. The earlier you get the ball rolling on financing, the better off you will be. Take the time to research your options so that you find the right financing for your individual needs.

There are several options that you may consider, such as:

  • Small business loans and microloans
  • The Paycheck Protection Program (which is designed to provide funding to small businesses that are struggling to retain their employees during the pandemic)
  • Economic Injury Disaster Loans(short-term pandemic financing for things other than employee retention)
  • Business credit cards
  • Business lines of credit
  • Inventory financing
  • Merchant cash advances
  • Small business term loans from banks, credit unions and online lenders
  • Vendor trade-lines
  • Accounts receivable financing
  • Purchase order financing
  • Equipment financing
  • And more

Each option has its own pros and cons so do your research and always consult a professional if you need guidance.

 

3.) Revise Your Business Plan:

Your business plan may have been working perfectly for your business pre-COVID-19, but now it may need some fine-tuning or outright re-writing. Specifically, you need to consider how your business will be able to adjust to the new normal once to survive during COVID or hopefully after it is gone. Take a good look at what was working for your business before the pandemic that may not work as well now and see where you can adjust or improve to remain competitive in your industry.

If you previously had a traditional brick and mortar shop before COVID-19, you may want to now expand into eCommerce or digital offerings since more people are turning to online shopping for all of their needs. If your employees are now working from home, you may consider keeping that arrangement.  In other words, you need to fine tune your business.

You should also take a good look at the current trends and what your competitors are doing in your industry. You may find a gap that your business could easily fulfill which could be critical to reclaiming and expanding your customer base going forward.

 

The second part of this series will offer you more recommendations including going over your budget, your budget, your re-build timeline and why you should have a plan in place for the next crisis. Stay tuned.

End of Year Small Business Tasks to Complete

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By Debbie Gregory.

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It is amazing that in a few short weeks, 2019 will be over and we a new year will begin. VAMBOA, the Veterans and Military Business Owners Association wishes all of our members, sponsors, colleagues and associates a happy, healthy and prosperous holiday season and new year.

We realize that December can be the peak of the selling season for so many small businesses. In addition, there are many other responsibilities and events with family and friends so time is at a premium.

Below are a few tips and tasks for ending your business year and things you should do in December that will position you right for 2020 as well as helping you to obtain the maximum tax benefits and comply with applicable laws.

  • Charitable Donations – This is the time to make them and it also the season for giving. If you have a pass-through entity such as an “S” corporation, you will benefit on your personal income tax too if you itemize deductions.
  • Check-in with your Accountant – This is an excellent time (if you have not yet done so) to discuss your taxes for 2019 to make sure you are doing all you can to mitigate the final number and plan ahead for 2020. Additionally, the final payment of 2019 estimated taxes is due January 20, 2020 so make sure you avoid any penalties for late or insufficient payments to cover them.
  • Check-out Legal Changes – There are all types of new laws on the horizon on the federal, state and local levels. These might include but not be limited to the new federal overtime laws. Your state minimum wage rate often changes at the beginning of new year and of course there are always various new income tax laws as well as new laws on defining an employee from an independent contractor.
  • Corporate Board Meeting – The end of the year is a good time to hold it if you have not done so already. Many states require corporations even those with a sole owner to do so and elect officers and directors as well as to take specific actions.
  • Compensation Plans – This is the time to plan to compensation plans employees and set them for 2020. You should keep in mind when doing this the cost of employment taxes such as social security and Medicare which will cost your company more in FICA with the maximum going up to $137,700.
  • Benefit Programs – This is the time to determine your benefits for employees such as medical plans, retirement plans and other benefits. Do so by keeping in mind some of the new 2020 rules that set new limits on 401(k) contributions and other retirement plans as well as health reimbursement for medical coverage
  • Employee Bonuses – This is the time for your year-end bonuses especially if 2019 has been a banner year. You will want to share the wealth with employees who helped make 2019 successful for your company as well as yourself if you are a shareholder-employee company. Keep in mind the cost of employment taxes too.
  • Inventory – This is the time with the end of the holiday season to review your inventory carefully. You should take a physical inventory and review items that you want to get rid of via a big sale and donate to charity or discard and write them off.
  • End of Year Purchases – This is often an excellent time to upgrade your equipment, computer systems, etc. By purchasing these items at the end of the year, it will provide you a write-off on your taxes and prepare you with what you need to begin 2020
  • New Date – It is a new year and you need to update anything with a date including your website, your website copyright and any collateral to reflect that it is 2020.

Happy New Year!

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