Would an extra $10,000 be good financial help right now?
If you are a small business owner, times are stressful right now with everything going on with the COVID-19 outbreak. You are not sure you are going to be able to pay on your loans, pay your staff, and even pay yourself!
During times like these, your first reaction as a business owner may be to slash as many expenses as you can, lay off your employees and hide under a rock.
I have been a business coach for over 20 years. I have seen these kinds of crises of economic nature hit our country and worked with small business owners to not only survive them, but to come out even stronger and more successful on the other end.
Yes, I had a couple clients call me and ask to put their business coaching on hold as they cut every imaginable expense, even one like coaching that is extremely valuable right now, akin to significant financial help. I have also taken on new clients and started with past clients who I have worked with in the past. While the economy was rocking, they had everything under control. Now, they are wanting an expert to help guide them through these unknown waters.
So what am I telling my clients this week?
Well, every situation, every business and every individual is different. However, here are a few things I have been working with my clients on to help them not only survive, but to thrive in the coming months.
1. Apply for the $10,000 financial help under the Coronavirus Aid, Relief, and Economic Security (CARES) Act
When you listen to the news, hear about the latest bailout program for big corporations, do you wonder “what about me?”
I am happy to tell you that whether you are a LLC, S-Corp or Sole Proprietor, you could be eligible for an advance of $10,000. This will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. The funds will be made available within days. This will not have to be repaid.
I have been coaching my clients through this process since it has been announced.
2. Paycheck Protection Program
Have you been paying yourself, but are not sure how you can continue? Not sure if you qualify for Unemployment? (You may, that is a different program!) Would you prefer to not have to lay off your assistant or other staff members? Maybe you don’t have to.
One program that was just released on Friday, April 3rd under the CARES Act is a Small Business Administration (SBA) loan program known as the Paycheck Protection Program (PPP). SBA PPP loans will provide low-interest loans, with a possibility for loan forgiveness, to small businesses affected by the COVID-19 outbreak that use at least 75% of the money for payroll and payroll related expenses.
If you want to know more of the details review this document from the Small Business Administration: https://content.sba.gov/sites/default/files/2020-04/PPP–IFRN%20FINAL.pdf
3. Protect your cash
Notice this is the third thing I mention and not the first?
What does protecting your cash mean? It means being careful the next couple months. Watch your expenses. Is this something your business really needs right now? Or can it wait a month or two.
Do you normally pay your credit card bill in full each month? Would it make sense to pay less for a month or two to keep cash reserves? Maybe, maybe not. Depends on your business and cash flow situation.
Be careful with this one. I want you to protect your cash, but also don’t want you cutting your marketing or expenses to the point that this has a negative effect on your business. When we are all out there back to normal, you can’t just restart your marketing. Your clients and your prospects need to hear from you now, more than ever.
This is a whole topic in itself, one I am working with my coaching clients on every day.
My last piece of advice, work closely with a coach through this all! Yes, it may feel like a luxury expense, but this might be the best money spent in the next few months.
If you are one of my current clients and have not had a call this past week, or you are concerned about cash flow right now, I highly recommend you get on my calendar this week!
We will get through these times. My clients are setting themselves up for amazing things later this year. When there is a crisis, you can either pull the covers up over your head and wait until it is over, hoping you will survive. OR, you can do the RIGHT things now to propel your business to a whole new level. We are living in interesting times. Let’s make the most of the opportunities that are lining up for us!
This should not be deemed as financial advice. Please consult your financial advisor before making any decisions for your business.