by Kenneth Surbrugg, Director of the Center for Entrepreneurship at Missouri Southern State University
What an interesting time for small businesses. With the spread of the COVID-19 virus, small business owners have been thrust into this temporary reality of shutdowns, temporary closures, uncomfortable requests, and the realization that this might last longer than what everyone originally hoped. COVID-19 has illuminated important practices necessary for all businesses. Here are a few of those practices that have been discussed with small business owners:
1. Know Your Business
Not just industry jargon but really understand your company’s sales, expense and cash flow cycles. Who are your main customers? How do you spend your money? What terms are you getting from suppliers, and what terms are you giving your customers?
2. Keep Accurate Records.
If you received a loan from the CARES Act (Economic Injury Disaster Loan or Paycheck Protection Program), you will need to provide proof of how you spend this money. That means that you need to have accurate records – supporting documents to justify the expenses. From what is known at this time of writing, you will not be given an extension to provide supporting documents. And these documents need to be accurate – so it will take some time out of your schedule to ensure that these documents are accurate and ready to submit to the proper entity. And make sure that you have a set as a backup.
3. Cash is regal.
In such times as these, cash is regal. Maybe this is a good time to revisit your business plan and look at your business’s sources and uses of cash. Can you re-negotiate a planned purchase? Can you negotiate different terms? What can you do to keep cash now in the business?
4. Be involved – get engaged.
How is your business’s social media? What is your messaging? How are you communicating with your customers and suppliers? How are you communicating with your community? If your business has temporary changes, do all of your online business listings (Google, FB, Instagram) reflect these temporary changes?
This COVID-19 disruption will end at some point. People will be allowed to gather in groups, travel, eat out, play, and work. The above-listed practices have a place in your business now and in the future. Take the time to know your business, keep accurate records, maintain cash, and be involved.