There is a deluge of information coming at all of us, particularly a challenge as a small business, an entrepreneur or as a contractor during this pandemic.
BACD can help you navigate these unchartered waters and get back to smooth sailing as quickly as possible.
First things first, ensure that you, your staff, and your customers are staying safe and healthy.
Now you can consider your company management.
Evaluating new distribution methods – How can you boost your traffic to your website, social media, email orders? Can you still solve their problems, however in different ways? We have clients at BACD who are now offering same-day porch delivery. Now is the time to creatively adapt, if you’re able.
Billing sooner and collecting faster – As soon as you’ve delivered the work, bill. Consider offering an incentive to pay early.
Holding off on major purchases – While things are so uncertain, big capital expenditures should be postponed if at all possible.
Managing inventory – aka, cash sitting on a shelf. Cancel or delay inventory purchases. Get creative with current stocks. Can it be returned, exchanged or offer incentives to customers to purchase more? VendHQ has a great article on creatively managing your inventory, read more here incentives? More ideas for managing inventory can be found here.
Reducing your payroll expenses – Postpone new hires and considering reducing hours and laying off non-essential employees.
Expanding your bill payment terms – Pay your creditors as slowly as possible, reach out to all suppliers, creditors, landlords and banks for deferred or modified payment terms.
Do you know how long your current cash reserves can last?
Current cash balances/Monthly cost still happening in virus response months = Your cash runway measured in months
CASH RUNWAY (USING ALL CURRENT CASH ACCESS OPTIONS)
Current cash balances + amount of cash that could be tapped (existing credit cards and/or lines of credit)/Monthly costs still happening in virus response months = Your longest currently available cash runway measured in months
Liveplan has an excellent article on cash burn rate and other suggestions around managing your cashflow.
Prepare to Extend the Runway
Many companies are finding that their cash reserves cannot cover operations for long. So, how can you fill the gap? First, reach out to your bank to see what options they may have available. There are some other regularly accessible sources of funds like your bank’s conventional financing or factoring accounts receivable that may now need reconsideration, but there are also some emergency loan options.
Pathwise Credit Union offers BACD Clients microloans and traditional loans. Read more here
BDC (Business Development Bank of Canada) has a selection of financial vehicles. Read more here
Business Documentation for Loan Applications
- Past 2 – 3 Business / Personal Tax Returns
- 2019 Income Statement & Balance Sheet
- Company Profile – Information on you and why your company was performing well prior to COVID-19.
- How much money you need and what you will use it for
- How you’ve pivoted in these unexpected circumstances, what actions you have taken to solve your cash flow needs and any measurements of decreased traffic, sales etc.
The Business Advisory Centre Durham (BACD) is here to help you take action. We are ready to help you with this entire process so you can find peace of mind and knowledge to take action. Call us at 905.668.4949 or email firstname.lastname@example.org