June 12, 2018
Introducing WEV’s Smart Money, a monthly article by Business Recovery Specialist, Nicki Parr. Each month, Nicki will share insights and tips to help small business owners feel more cash-confident and economically empowered. If you have a finance-related question that you would like answered, email Nicki at nparr@wevonline.org. In this first article, Nicki shares her Top 10 tips for Financial Recovery following a business interruption.
Top 10 Tips for Financial Recovery following a business interruption
It sometimes seems that life has become increasingly unpredictable, with many of us directly or indirectly impacted by natural disasters and other events beyond our control. One way that we can feel more in control during an out-of-control situation is to be prepared with a checklist of steps that we, as small business owners, can take when disaster strikes and our bottom line takes a hit.
- Speak to your lenders. Tell them what has happened and ask them if it is possible to postpone repayments for 2-3 months or switch to interest-only payments for a few months.
- Speak to your landlord and ask if they would consider a temporary rent-reduction.
- Reach out to your existing customers via email, social media etc., offering a 10-15% discount for the coming month(s).
- Organize a promotion or event to raise your profile and draw in new business.
- Be aware of any special loans that may be available to you. For example, if an area is officially designated as a disaster zone by the government, SBA loans will be available to qualifying individuals and businesses. Check your local government website and your local SBAC.
- Stay current with your credit card payments. Pay just the minimums if you have to but try to avoid skipping repayments completely as this will negatively impact your credit score.
- Partner with another local business to come up with some joint initiatives to increase revenue and develop local synergies. Develop a new product or carry a new line.
- Review your business insurance. See if you can claim for any business property loss or business interruption. Speak to your insurance agent to ensure you are adequately covered against future events.
- Prepare a cash-flow forecast that accurately reflects the new economic environment. Cut back any unnecessary expenditure for the immediate future.
- Personalize your recovery plan. What do you wish you had known/done before the interruption? How can you be better prepared next time?