Over the past week, business owners have been flying by the seat of their pants, trying to implement work from home procedures, limiting social interaction in the workplace and creating environments that adhere to purposeful social distancing guidelines.
Monitoring the financial well-being of the company, when the situation changes by the hour can feel stressful and overwhelming at times. You may be facing lost revenue, reduced employee productivity, interrupted vendor supply or a complete business closure.
The uncertainty of the situation and identifying the steps you need to take to protect the long-term future of the business can seem daunting. Create a plan for the things you can control by reviewing the following:
Check Your Insurance Coverage:
Start by being fully proactive and contact your insurance company to see if your policy contains business interruption insurance coverage. Depending on the policy there may be some coverage available. Ask your agent if they are implementing any premium deferral programs. There may be something that they can do, if your coverage excludes “infectious diseases”.
Create an Emergency Budget:
If you can reduce business expenses, do it now. Review all non-essential spending. Take a hard look at your cashflow and determine if decreasing revenue would impact your ability to cover your fixed costs. This is not the time to overly optimistic so consider your finances obligations in terms of months, not weeks.
Create a simple budget that contains expected income and all associated business expenses. How many months could your business maintain its financial obligations?
If you are unsure of your numbers, this IS the time to reach out to your accountant to review your financial statements. This could be a critical time for your business, making a budget and knowing your numbers is not only responsible, it is essential!
Your accounting professionals may also have resources or information of government programs that could provide temporary assistance.
Talk to Your Banker:
The Bank of Canada recently announced interest rate cuts, in light of COVID-19. Consider reaching out to your bank to discuss the option of consolidating high interest loans. If you own your building can you get a mortgage deferral? The major Canadian banks are announcing support programs, that your business may be eligible for.
Communicate with Vendors: If you think you may have trouble paying vendor invoices on time, let them know immediately. Whatever you do, don’t knowingly miss your payments without communicating with your supplier.
They may be in the same situation, and your payment may impact their payments and so on. It is in the best interest of YOUR business to create WIN-WIN situations where you can. These will be the same vendors your business may need after the immediate concern has passed.
The situation is evolving daily, and it is hard to manage your business, plan for the worst and hope for the best!
Muia Consulting is facing the same business challenges, staff are working remotely, client meetings have been switched to online or phone calls.
We are here to help. If you need information, let us know. If you need financial support, there are government tax deferral programs we can discuss.
We are here to support you in any way we can. Contact our office at 647-493-0541.