COVID-19 and “social distancing” are rocking the business community, especially retail, restaurants and bars. If your business is empty or closed, you need to do everything possible to reduce overhead and conserve cash. Here are six practical and common actions you can take TODAY to manage your cash flow:
Defer Your Lease
Deferring your rent payments for a few months can give your business some breathing room to recover from lost revenue. Call your landlord today to discuss this possibility. You can propose that 2-3 months be added to the end of a lease as possible negotiation – your landlord might consider deferred rent as better than no rent at all.
Reduce Expenses
Control all spending and purchase only what you absolutely need. Make just-in-time purchases to minimize cash spending. Where possible, negotiate with vendors to delay bill repayment. Contact your utility providers to see if they have any special initiatives to defer payments – and stop all utilities you don’t need.
Suspend Loan Payments
Negotiate with your lenders to pause or reduce your loan payments, possibly by extending the length of term of a loan. You can propose to your lender that loan payments for 2-3 months be deferred and added to the end of your loan term – your lender might consider deferred repayment better than no repayment at all.
Reduce Payroll
If you lay off staff, they can collect unemployment insurance provided they actively seek other employment. If they are employed elsewhere, it will be hard to get them back once you are up and running again. Instead, work with Employment Security to explore ways to reduce your workforce that allow your employees to receive unemployment benefits without actively seeking other employment, such as Shared Work, Partial Employment, Temporary Layoffs, Standby Employment and Furloughs. View the information for Washington state.
Check Your Insurance
Is business interruption/continuity insurance included in your policy? Contact your business insurance broker to see what compensation is available through your policy. If you don’t have business interruption/continuity insurance, consider adding it to your policy for the future.
Get Creative
Look for opportunities such as use of technology or deliver products and services instead of having customers come to your location. And then spread the word!
Questions? CIE and the SBDC are available to assist businesses struggling with the impacts of the coronavirus. Even if we are not the right resource for your situation, we’re happy to make referrals. Contact us.
