by Debi Enders
Let’s be honest. There is much we don’t know about the economy right now. Its volatile swings have most people wondering what’s next. So let’s focus instead on what you can do to best protect your business today.
- Preparation and creativity are key. Consider the worst-case scenarios for your business plan’s most critical success factors. Begin planning how you might redeploy efforts (and cash) that will bolster sales. If you don’t have an online presence, for example, now might be the time to create one.
- Talk to your bank. We cannot stress this enough. Some banks are offering relief to those businesses that have been impacted by COVID-19. For example, some existing loan customers may qualify for payment deferments. Or business credit card account holders may be eligible to skip payments, have late fees waived, or may be considered for a revised payment plan with reduced payments and fees.
- Watch for opportunity. There is suddenly a glut of great talent available. If feasible, this may be a great time to add to your work force or leverage contract and freelance workers.
- Communicate transparently with your customers: We are all in this together. Customers will likely empathize with companies facing a crisis as long as you communicate with them properly.
- Improve cash flow. If you have no formal collection system, now is the time to create one. Perform regular follow-ups with customers who fall behind to remain high on their bill-paying list.
- Protect against fraud. Accounting irregularities, price gouging, and outright fraud is increased during economic downturns. To protect against fraud, adopt stronger internal controls. Your bank should offer tools to help you prevent fraud.
- Manage your risks. If you can lock in prices on raw materials now, you may be able to hedge against spikes down the road.
- Be flexible. Don’t plan too far out if you aren’t willing or able to adapt quickly.
This situation may impact business for a while, so show leadership within your team. Be prepared to develop new plans and policies. Don’t get stuck in decisions you made last week.
Debi Enders (debi.enders@commercebank.com) is vice president, small business banking at Commerce Bank.
Submitted 3 years 354 days ago