The coronavirus or COVID-19 has created concern for financial circumstances for both families and businesses. With the frenzy-induced behavior of selling stocks and mandatory governmental lockdowns across the United States, the financial situation for day to day businesses has become disrupted. As a small business owner, the coronavirus immediately impacts your personal finances as well as other implications, such as the inability to continue paying your employees. Therefore, with an everchanging situation with an unknown timeline, Bryant Consultants is offering a 90-day cash flow plan for small business owners that could help you get through these unstable financial conditions.
Outline Your Cash Needs
Review and calculate the cash requirements needed to sustain your business, and your family, for a monthly and quarterly basis. For business requirements, monitoring and spending less for supplies or excess inventory, merchant fees, or salaries could be of assistance in releasing additional cash when needed. For your personal cash requirements, you may need to discuss the current situation with your family about reducing luxury expenses such as dining out, entertainment, hobbies, or traveling.
Consider Cash Sources
Finding the cash to cover necessary expenses such as rent, utilities, insurance, or loan payments can be tricky in a time of financial duress. Therefore, tapping into additional cash resources could help alleviate or ease cash flow needs. By speaking with your creditors to request a payment deferral or pay interest only on your debts, you could increase your cash on hand fairly easily and quickly. You could also access lines of credit that are available to you through your business, home equity, an unsecured line of credit, or a possible 401(k) loan. An additional source that is commonly overlooked, a stock brokerage account could provide a significant amount of cash depending on your portfolio.
Determine Your Priorities
Strategizing which areas should be handled first and in which order could determine the success of managing cash flow concerns over the next 90 days. Review the necessary expenses for your personal and business needs. Then establish deadlines for each item to help with prioritizing the process. In addition to the necessities for your personal and business cash flow needs, it is important to remember other requirements for taxes and funding programs. For example, the following needs have a government-mandated deadline of July 15, 2020: 2019 Tax Extension Payments, 2020 1st Quarter Tax Payment, and 2019 IRA Funding. Also, there is a pre-existing deadline of October 15, 2020, for 2019 Qualified Retirement Plan Funding. As you sift through priorities, remember that you will need working capital available when it is time to reopen your business in the event that you need to close it during this worldwide crisis.
Improve Small Business Cash Flow
During this time of financial uncertainty, having a well-constructed plan of financial awareness and preparedness could go a long way for your peace of mind. With a plan in place, you could breathe easier and enjoy this time of togetherness with your family. If your small business is struggling and you need assistance or would like more information on how to manage your practice during this time of crisis, feel free to contact Bryant Consultants at (877) 768-4799 for a private consultation. We also encourage you to check out our latest blog on the CARES Act and how it could financially benefit your business. The President officially signed the CARES Act into law on March 27th to offer financial relief for small business owners during the coronavirus pandemic.ll)
