Many people are still panicking about the coronavirus spread. Your small business may be seeing a huge decline in traffic as people are self-isolating. Instead of panicking, though, you must do a lot of planning. If you are not sure how, make sure to schedule an appointment with our business consultant, Danny Star, on how to deal with this pandemic.
Precautionary Measures During Any Crisis
Many businesses were caught off guard about this outbreak. They didn’t expect this crisis to happen. But there is no need for you to be frightened. What you must do now is to create a plan.
No one can tell how long this pandemic remains. It could be a few more weeks or months. But no matter how long it will stay, you need to have a plan for your business now.
Many large businesses have an emergency preparedness plan. If you don’t have one yet, then it is time for you to create one.
Having an emergency plan will give you an outline of what steps you must take if this pandemic will negatively affect your business. It also includes the measures you must take to protect your employees when the pandemic gets worse.
Use the Stimulus Package Wisely
The US government has released a stimulus package for small businesses. When you receive the funding, you should use it to pay for your utilities, rent, bills and payroll costs.
Regarding low-interest loans, they are handled by the SBA or lenders. In that case, terms of the loan are defined by them. If you need to obtain a low-interest loan, though, you must consider your overall finances.
Keep in mind that a loan is a loan, even if it involves low interest. Remember that you still have to pay it back. That said, you must plan how you will pay it off to prevent accumulating more debt in the future.
The goal of the funding is to help your overall business. Before you commit to a loan, you must talk to your lender and ensure that the option is right to your business needs.
Seek the help of a business consultant on how to properly use your loan. Should you use it to acquire products or utilize it to pay your employees? Talk to a consultant first so you will be guided properly. Contact: (855) 605-7361.
Consider Tax Deferrals
The stimulus package bill can also help your business in paying your payroll taxes. The bill defers taxes until December 31, 2020.
However, it is vital that you don’t stop the paychecks of your employees. But the tax deferrals will lower your burden as you will not pay a costly tax.
For every employee, you need to pay up to 6.2% to the SS and 1.45% to Medicare taxes. But with tax deferral, you can let go of that cost temporarily as you focus on how to mitigate your declining profit during this pandemic.
Is it Possible to Delay in Paying Your Employees?
The stimulus package has been approved to ensure that small businesses can pay their employees, titles and other operational costs. In that case, you must release payment to your employees for the days they worked. You should also pay for sick or family leave.
But you may pay your payroll tax later.
How to Pay the Bills?
This is one of the greatest concerns of many business owners. Although you can use the check the government has given you, the main question is how long does the check last? How are you going to pay the bills this week or next week?
As Danny Star recommends, you must create a cash-flow budget. It should list all fixed expenses and variable costs. You should create priorities and know which ones are more vital.
You must get rid of the unnecessary costs that are not giving you revenue. Regarding your employees, you may have to let go of some of them, but only temporarily. They can seek unemployment benefits from the government.
You may also choose to furlough your employees. They will receive a minimal amount because of the reduced hour. However, you must not ask them to work for you for free.
However, if your small business could no longer handle paying your employees because of a reduction in your profit, you might consider terminating them. They can also apply for unemployment benefits.
But you need to find other financial sources of revenue. For instance, you can start taking online orders, if it is applicable. Not sure how to begin shifting your business online?
Contact Business Consultant Danny Star
Consider talking to our business consultant, Danny Star. He can give you recommendations on how to migrate your business online so you can start taking online orders and prevent yourself from filing for bankruptcy.
To talk to our business consultant Danny Star, please give him a call at (213) 322-0770.