As we head into the weekend, here are 5 things every business owner can do now to help their business during these difficult times:
We are monitoring the developments of COVID-19 and its impact, in particular, on Virginia businesses. Uncertainty is a thick cloud around us right now, with no apparent light on the horizon. As we head into the weekend, my hope is to spur you to action with 5 Proactive Steps every business owner can take right now.
1 - Don’t wait and see.
Especially with no clear resolution at the moment, there is a temptation to “wait and see how things go”. However, business owners can be proactive by assessing their cash flow needs for the next 90 days and starting to make decisions based on that. Set aside the time in the very immediate future to really sit down, take a hard look at your financials for the next 90 days, and determine how you will address cash flow needs if the situation extends out 2 weeks, 4 weeks, or more.
There are resources available already. Check out our other discussions on SBA disaster loans and similar options. Finding solutions will be critical if our timeline extends in this current scenario, but the first step to take is assessing where things are right now.
2 - File your 2019 tax returns NOW if you expect a refund.
Though the Federal Government has announced an extended filing deadline of July 15 for both corporations and individuals, there’s no reason to wait on filing if you are expecting a refund. That goes for state refunds as well. Go and get the cash. If you believe you will owe taxes, then you have some different decisions to make. With the extended federal filing deadline, you don’t have to file until July 15 AND there are no penalties or interest with that extension. So this gives you some breathing room.
If you owe taxes in Virginia, be sure to file your tax return as scheduled by May 1, though you won’t have to pay until June 1. Virginia is a little bit different, as they are still assessing interest, so do keep that in mind. If you have the means to pay it, and it’s not going to impact the rest of your cash flow, still consider paying it on time.
3 - Request payment deferrals.
Contact all of your creditors, including your landlord, and talk to them about payment deferrals. If you have loans (SBA loans in particular but also any other type of bank loans), reach out to those creditors and ask about options to defer up to three payments. Other options might be to freeze or do half payments. Any of these adjustments can help you in a cash flow crunch, especially when we’re uncertain as to the planning horizon. Again, assume you’re planning over 90 days (or try 60 if creditors won’t look that far out) and make decisions and reductions based on that timeframe.
4 - Draw fully on lines of credit.
The next thing to consider doing is something that is grabbing the headlines. We’re seeing large corporations draw fully on extensive lines of credit to hold on to the cash. This is definitely something to discuss first with a CPA, but it’s something to seriously consider. If you do have access to a line of credit and you aren’t exactly sure what your cash flow situation is going to be over the next couple of months, drawing that money to hold onto yourself will lessen the blow considerably and help you make decisions from there.
5 - Don’t stick your head in the sand...stay up-to-date.
Things are changing rapidly! We’ve done three updates so far (as of Friday, March 20) and things will only continue to change over the weekend. We will continue to monitor the situation and provide updates specific to Virginia businesses. It’s really hard to sort through the noise of the national news to determine what applies to you as a Virginia business. We are doing our best to sift through and hone in on the most applicable news and resources.
Bookmark our blog or follow us on LinkedIn to stay up-to-date as we learn more. We wish everyone the best in this evolving situation. Don’t hesitate to reach out to me, Jenn Loges, personally on LinkedIn.