Staying open and operational during COVID-19 is a priority for all business, small and large. While many have flocked to payroll relief funds, Economic Injury Disaster Loan and the SBA for assistance there are things that you can do as the business owner or officer to reduce cash flows while waiting for loan applications to be approved.
1. Look through some of your recent expenses. Do you have subscriptions on auto-renew that you no longer need?
2. Do you need to make purchases for supplies and equipment and have points or credit on credit cards that could be used instead of cash?
3. Can you negotiate payment terms with any vendors or suppliers that you loyally purchase from? Many are willing to work with you to support their customers.
4. Barter. The construction/trade industries are skilled at hands-on work. If you have a need, professionally or personally, see if you can barter your services for theirs.
5. Use your own tools instead of buying replacements when needed. Many in the construction/trade industries are sole proprietors or single-member LLCs. If you don't have the cash to purchase tools but have them in your garage then use them. It's better to have the tools to make money than not, and it counts as a contribution of an asset by you providing additional tax benefits.
6. Negotiate new contracts on cell phone plans, internet, insurance plans and other overhead costs. Not all costs are set in stone and having a strong payment history and relationship with those suppliers could provide room for leverage.
Be resourceful in the same way you were when first starting your business. Just as starting your business involved low cash income and higher expenses, this will pass. Look for unconventional ways to get through this and remain confident. We're in this together and we'll get through it together.
**If you need assistance reviewing your expenses to cut costs we can help.