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QuickBooks, a Salesforce partner, wrote this article.
This past March brought two of the largest one-day point drops in the 120-year history of the Dow Jones Industrial Average. Due to this market volatility, small- or medium-sized businesses (SMBs) may justifiably feel uncertain in the current business landscape. And, while we can’t predict the outcome of the financial markets and its effects on the economy, there are a few actions you can take for a better outcome. Here are three ways to set the stage for financial stability.
Take a look at your current assets, including your existing inventory, real estate, cash, and equipment to determine your current financial standing. Then perform a quick cash flow analysis by comparing your total unpaid purchases to your total sales due at the end of the month. If that sounds daunting, you can download a Statement of Cash Flows template for Excel or run that report automatically in QuickBooks.
If total sales exceed unpaid purchases, you may want to look into cutting monthly expenses, such as:
Consider going digital in your marketing and communications to cut material expenses.
Consider renegotiating your lease to get a lower monthly rate or a delay in payments.
Try downsizing your worksite by moving into a smaller space, consolidating your supplies into one place, or reducing the number of vehicles your business uses.
You could also power down equipment that uses a lot of energy like a walk-in-cooler and display lighting for immediate savings.
Meanwhile, remember debt can actually be your friend in times like these — provided you eventually pay it back, of course. If you struggle to meet your debt obligations, prioritize the bills most important for your business operations like your water, heat, and power.
Another thing to consider: during this pandemic, lenders will not be surprised if you reach out to negotiate for an extension, forgiveness, or reduced payments. Lenders may be able to offer payment plans or financial assistance.
Research emergency assistance options to help you prepare for anything that comes your way in the future. If you don’t work with a financial advisor, an accountant, or a bookkeeper, you may be able to find one through your local Small Business Development Center (SBDC). An SBDC counselor can also offer financial advice, help you find loans, or provide you with other business tips.
Depending on your business type, location, or needs; you may be eligible for specific loans or grants from the Small Business Administration (SBA) or state agencies. The SBA offers disaster assistance loans and other 7(a) loans with competitive terms. A 7(a) loan is a small business loan guaranteed by the SBA. There is more than one type of 7(a) loan, like the Standard 7(a), the 7(a) Small Loan, SBA Express, Export Express, Export Working Capital, and International Trade loans.
The Paycheck Protection Program (PPP), which has had an injection of additional funds after briefly running out in early April, is one 7(a) loan created in response to the economic effects of COVID-19. Approved SBA lenders like QuickBooks Capital are now accepting applications. To find lenders near you, visit the SBA’s PPP Finder webpage and select your state.
There are various tools to determine if you qualify for any of these credits or relief programs. Your financial expert can advise you on how to claim these credits when the need arises.
Finally, financial relief might come as a tax deferment or credit. To mitigate the recent economic downturn, the federal government has rolled out multiple tax credits to help small businesses afford sick leave, payroll, and other expenses. The government extended the tax deadline until July 15, 2020. Small businesses can use that extra time to recover sales and adjust spending.
Once you’ve assessed your finances, explore how to improve existing sales. During economic uncertainty, technology can help you find new customers and open up new revenue streams.
Historically, ecommerce has threatened brick-and-mortar stores. But physical stores prove they can also play the ecommerce game. Shops that previously relied on in-store sales and events are taking new initiatives to reach customers. In response to the market, some stores have increased their retail offerings with online storefronts to meet customers where they are. Etsy, eBay, and Amazon are a few places where businesses might be able to list their products.
“The one positive we’ve taken from this is that it has forced us to get better at ecommerce,” said Marketing Director Chad Dryden. “We will emerge from this with an even stronger online team and increased presence on the global music retail market.”
If you don’t already have an online store, your business can set up an online shop or offer online services. Consider a customer relationship management (CRM) system as you grow. CRMs can help ecommerce stores improve customer service and retention by personalizing your message for every single customer you reach.
Social media is also a must for a successful ecommerce store. It allows you to build relationships with customers while informing them about specials and sales. Follow best practices and research your target audience. With some time and attention, your social media presence can become a business lifeline.
Small businesses may not have much financial room for error. But preparing your business finances today can help you weather any storm. With new revenue streams and strong customer relationships, your community may be able to carry you through times of need.
Salesforce helps you find more customers, win their business, and keep them happy so you can succeed. Learn more about our small business CRM solutions by following us on Twitter, LinkedIn, and Instagram. Plus, join the Small Business Strong LinkedIn group, a worldwide network for small businesses to access resources and connect with one another.
For more business and leadership inspiration, check out our entire Leading Through Change series.
For more information about the QuickBooks Capital enabled Paycheck Protection Program loan application process, please refer to their site.
QuickBooks Capital is licensed as Intuit Financing Inc. (NMLS # 1136148), a subsidiary of Intuit Inc. In California, loans are made or arranged under CFL Licensed #6054856. Intuit Financing Inc., (d/b/a QuickBooks Capital) is an authorized SBA Paycheck Protection Program Lender.
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