Dear Small Business Owner,
The coronavirus (COVID-19) has taught us a few lessons. Amongst them are the importance of having a comprehensive contingency plan.
The failure to have a contingency plan can have catastrophic effects on your business, your employees and your personal life.
A large number of small business owners are tied to their business in more ways than one. This represents their main source of income that is also funding their personal lives. Take away that safety net, and you are left exposed.
I think about the average business where the owner manages the day-to-day operations and now you are forced to close!
No money coming in!
Unpaid bills that were already due before you closed!
Upcoming bills!
Rent is due!
Your employees need their salary!
Given the importance of this stream of income, actions must be taken to protect your business.
Some useful suggestions are below:
Establish an emergency reserve fund - At a minimum, this fund should comprise funds that would support your business operations for at least a 6-month to 1-year period.
If you are a retail-based business, develop a mobile strategy
Build alternative sources of income
If you do not have any of the above already, I know you have become really creative at this time because your life depends on it!
Financial planning is paramount. Mishaps show your ultimate vulnerabilities and in effect this is the case now. Left, right, and center, we can see businesses forced to close their doors and some sending employees home with little to no pay - For most it's not by choice, it's by necessity. They cannot afford to pay it.
You must consider alternative sources of income. It is necessary! As a professional nail technician or hair stylist who only generates income when services are rendered, how are you coping now that you cannot provide a service?
As a taxi driver, straw market vendor, farmer ... how do you manage?
During this time, I implore you to consider alternative sources of income.
Can we say that we had a contingency plan in place? Did you, as a small business owner, perform an assessment and estimate how much money you would need should your business not be operational for an extended period of time but bills still must be paid?
How many of us operated on a sale to sale basis whereby bills were paid only if income was earned? A lot of us can say that we did.
This experience should, in effect, cause us to reconsider our business model as well. Understandably so, some businesses cannot change much because of the nature of the services offered.
While you are so consumed by the news and the health impact COVID-19 has had both nationally and globally, it is hard not to think about the impact that this will have on your business going forward.
Be optimistic and develop a SMART plan.
Instead of worrying, PLAN! Do not become so burdened because you are focused on the business that you compromise your mental health. We need you!
Lets focus on SMART business where our money is working for us and not the other way around!
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