The COVID-19 outbreak has negatively affected countless people around the world, and small business owners are no exception. In addition to causing many businesses to shut down or significantly reduce their in-person operations, the outbreak has also disrupted supply chains, has forced layoffs, and has sparked myriad other issues. Regardless of what you believe should be done in response to the virus, there is one thing that remains universally clear: the virus itself has created a tremendous amount of uncertainty.
In the small business world, uncertainty can create a host of new challenges. If a restaurant doesn’t know whether it will be able to serve food next week, doing things such as placing delivery orders and managing payroll will all become much more difficult. These businesses can be both overprepared and underprepared, both of which can result in glaring inefficiencies.
Planning for the future is something that today’s best accounting firms already know is challenging, but the extreme volatility we’ve already witnessed in 2020 has made this task even harder. However, even keeping these things in mind, there are still quite a few things all small business owners can do to help them weather these uncertain times and even prepare themselves to thrive.
Take Advantage of All Government Programs and Tax Deductions
Following the outbreak, the government has created a series of programs to help small businesses, including the CARES Act, the Economic Injury Disaster Relief, the Paycheck Protection Program (PPP), and many others. Additionally, the government has also reduced disaster tax deductions, some tax deferment options, and even some debt-forgiveness programs. Navigating these programs can be challenging and, in some cases, the window to apply for support may be very limited. Be sure to have a small business accountant that can not only help you adapt to these changes but also adequately (and legally) take advantage of these new laws.
Give Yourself an Opportunity to Scale
In a world that is plagued with uncertainty, it can be very difficult to know where your small business will be one year or even one month from. If you were to run 10,000 different simulations, some of them would likely move your business in a positive direction, whereas others would move your business in a negative direction. Naturally, you’ll want to put yourself in a position where you adequately adjust to all likely scenarios, meaning that scalability should be at the forefront of your mind. Hiring scalable outsourced partners—such as accountants, lawyers, marketers, and even labor that all work on an as-needed basis—will make it much easier to adapt as new market conditions unfold. Creating conditional contracts (we will deliver x product if y event occurs) can also help reduce your exposure to the risk of uncertainty.
Take Advantage of Unexpected Opportunities
There is no denying that the COVID-19 outbreak has had a negative impact on the economy. But when things become undervalued, this means that those who are able (and willing) to take action will quickly find themselves finding unexpected opportunities. For example, the outbreak has pushed already low mortgage interest rates lower, meaning that the risk of investing in real estate has been widely reduced. Additionally, many banks—particularly those that partner with the SBA—are also expanding their lending pools and creating some easier paths to capital. Furthermore, with many people suddenly unemployed, the labor pool has been flooded with new talent. While your business may be hesitant to make any major commitments during times of uncertainty, expanding your operations appears to be more affordable than ever before.
Consider Permanently Cutting Certain Expenses
When many small businesses, even including brick-and-mortar retailers, were forced to suddenly shift to a work-from-home or digital model, they were worried things would never be the same. But some owners were surprised to find that their new model was just as productive—or even more productive—than their old ways of doing business. If cutting back on infrastructure, physical locations, full-time staff, and other expenses does not seem to have a direct effect on your end product, then you may want to consider carrying these “temporary” changes forward.
The business world is full of uncertainty and this simple fact of life is clearer than ever before. But even though times are tough and future conditions are uncertain, there are still many ways to prepare yourself to continue moving towards its long-term goals. With a holistic approach, a willingness to adapt, and the ability to spot new opportunities, 2020 can still be a great year for many business owners.
Contact us to learn more about how your business can keep moving forward.