6 Smart Money Moves to Make Right Now as a Business Owner – Entrepreneur

Posted: April 17, 2020 at 7:51 pm


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April 15, 2020 6 min read

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Its a troublesome time for everyone in the business world right now, particularly for those of us who own our own businesses. My business, Student Loan Planner, launched in 2016 and grown steadily over the past four years. However, as a CFA and former bond trader, I always knew the day would come when wed need to weather a storm.

Here are sixsmart money moves Im taking for my business right nowthat I suggest you do as well. You want to set your business and employees up for the best possible success as our country navigates this health and financial crisis.

This should be No. 1on your list before doing anything else I mention in this article. Under The Paycheck Protection Program, employers with less than 500 employees can access funding to cover up to eight weeks of payroll and certain other operating expenses. That gives you more cash to motivate and retain your team. Throw your hat into the ring like everyone else. You want this lifeline.

Related:How to Submit Your SBA PPP Loan Application and Calculate the Loan Amount

The U.S. Small Business Administration is providing low-interest working capital loans of up to $2 million. These loans are designed to provide economic support for small businesses that have lost revenue caused by the coronavirus pandemic.

Check out your states programs for businesses. Many states are providing resources and support to small businesses. For example, California and Colorado have work-sharing programs that provide partial unemployment benefits as an alternative to layoffs. Lastly, for local business support, contact your local SBA office or Chamber of Commerce for additional resources specific to your area.

Most people are assuming they will be let go at this point. More than 6.6 million U.S. workers filed new claims for unemployment benefits last week, on top of 3.3 million a week earlier, which means if you can offer anything better than a layoff, your team will greatly appreciate it.

My company is trying toretain as many employees as we possibly can by cutting their hoursbut continuing to pay them something. Doing this means we can conserve cash but try to mitigate the psychological turmoil that comes from being furloughed or laid off completely.

Related:What Leaders Can Learn From Governor Cuomo About How to Communicate During a Crisis

Going this route also encourages employee loyalty your employees will always remember how you acted at this time. If you did everything you could to keep them on payroll during one of the biggest financial crises weve ever seen as a country, they'll support you too.

Your customers and clients are going to remember what you did right now for a very long time. How can you prioritizecustomer service and content at a time when they need it most,even if that means a loss in short-term revenue?

Right now, my company doesn't expect to make much money from the content we're producting in the short term, at least. From showing people how to get their seized tax refunds back if they're in default,to advice on how to cut their monthly payments, to demonstrating how to get loan forgiveness credit instead of refinancing, on which we make a commission.

Customers need guidance right now, and the best brand advertising you can do is to have them remember your company was there for them during this economic crisis.

Many businesses that were already in tenuous positions before the disease started spreading will likely not reopen. If you think about the supply-demand curve you probably learned in your Econ 101course in college, the supply curve probably shifts up and to the left after this because fewers businesses will exist to buy goods.

That means the quantity supplied of goods and services will be lower, and the price you can command will be higher. Meaning, if your company survives, having fewer businesses to compete with will mean higher profits for your company long-term. If your company is in a financial position that gives it a goodchance of surviving this crisis, implement this strategy into your long-term plan.

Related:Entrepreneurs Review the SBA PPP Loan-Application Processes

In addition, businesses have pulled back from paid advertising in a huge way thats a big opportunity if you have cash to burn. For example, say you know each of your email subscribers is worth $5 long-term because you sell a digital product. If the cost of acquiring one of these subscribers on Facebook was $2 but is now $1, you should be excited to spend that money right now. You can acquire these leads for 50 percentoff.

As a business owner particularly one who is trying to protect his or her employees from layoff youre going to take a hit to your personal finances right now. That's where an emergency cash fund comes in.In a recession, even if you have a stable job, you should have cash to cover six months of expenses on hand. If you have an economically sensitive job, it should be one year's worth. You need to include any required loan payments as part of this calculation.

As a business owner, conserving cash is everything right now. If you have to borrow money to get emergency savings, do it. You know how they say on planes that you must put your own oxygen mask on first before helping others around you? The same goes for your personal finances when you own your own business.

This is perhaps the most important tip I can give you right now. Youre not going to make the best financial decisions for your company if you dont take time to blow off steam and relieve anxiety. The worst thing you can do is sit down and stew about your business 24/7. Whether its watching Tiger King or Ozark on Netflix or taking a walk in nature, make sure to clear your head every day for the sake of your business and your own personal well-being.

Related:What the Entrepreneur Staff Is Doing to Stay Sane and Productive While Working From Home

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6 Smart Money Moves to Make Right Now as a Business Owner - Entrepreneur

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April 17th, 2020 at 7:51 pm

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