10 Things for Every California Business Owner to Consider Due to COVID 19
Every business owner has been affected in one way or another by COVID 19. However, the key is what to do about it. From employee, client, and customer safety to financial struggles and concerns, there are things you can do to protect yourself and your business. Here are ten things every California business owner should consider due to COVID 19
Safeguard Yourself and Your Business
Have a physical location? Or do you interact with customers or clients in person? Then you want to avoid being a potential transmission zone. This means even as state and local requirements relax, you must remain vigilant. Take protective measures like:
- Health Advisories at every entrance.
- Temperature and/or symptom checks.
- Social Distancing (no hugs or high-fives)
- Encourage Remote Work (when possible)
- Safeguard Your Customers and Clients
- Hand Sanitizer, and lots of it.
Remember, until we have a vaccine or larger “herd immunity” COVID will continue to be a factor regardless of local regulations. The only solution to be physically as safe as possible involves social distancing and personal protection.
Black Swan and Exit Planning
Every business should have a plan for a rainy day, but most don’t. Even if they do, there is no way anyone could have predicted a global pandemic with worldwide economic implications. So even when this event is over and a new normal is established, get your business recession-proof if at all possible.
- Increase savings.
- Have business impact insurance.
- Have a cashflow plan.
- Get COVID 19 help when and where available, like PPP loans.
- Cut costs and perks.
- Diversify to alternate streams of income.
The other key is to always run your business like it is for sale. Have your financials in order, and if they aren’t already, use this time to get things in shape. Develop better cashflow projections, and put succession plans in place even if you plan to be in your business for many years to come.
Businesses that are more prepared when Black Swan events, like a pandemic, occur, are much more likely to survive.
Establish Cost Flexibility Where Possible
While some costs are fixed, some are flexible or can be made so. Look at auto-ship items, subscriptions, vendor invoices, and even your lease. See where you can make things flexible to cut costs short term even if you have to make them up in the long run.
This cost flexibility may mean layoffs or furloughs, and while we often don’t like to talk about them, they can be necessary to balance budgets in the short term.
Develop a Plan for Cashflow during COVID 19
Cashflow is easy to define, harder to manage. It is simply the money you have in the bank at the beginning of the month and the end of the month. A good cashflow plan makes allowances in projections for annual expenses, large purchases, and disastrous changes in business income.
The right cashflow plan can see you through even the most persistent of catastrophes, and you can boost the cash you have on hand in a variety of ways. You do this by knowing what assets you have and what is liquid and what isn’t.
You can also borrow short term, borrow from yourself, liquidate excess inventory, and other methods of raising cash. Just understand the impact these things, like loans, may have on your long-term cashflow after a recovery from COVID 19.
Consult with Leadership and Other Business Owners
No matter what business you are in, you don’t have to go it alone. There are focus groups, masterminds, and other networking opportunities to learn what other businesses and business owners are doing, what you can imitate, and what you can contribute from your own experience with COVID 19.
Many of these groups are now meeting virtually, have online communities, and enable you to engage at your own comfort level. Consult with leaders and other business owners, and make informed and intelligent decisions.
Get a Business Valuation
Sound like odd advice? Hardly. Many businesses get business valuations every single year to help determine if their company is growing, shrinking, or stagnant. This is part of running your business like you may sell it at any time. To do that, you need to know what your business is worth.
But why now? Because we know, regardless of what happens next, that business values will be different next year. And if you can show that your business has grown or weathered the storm of recession well, it will have greater value. This means you will be able to execute your exit strategy regardless of when you decide to pull the trigger.
Even if you don’t need a certified business valuation at this point, we offer a free tool on our website for valuing your business in seven easy steps. We’ll provide you with a spreadsheet tool and instructions at no charge. Then when you are ready for a certified valuation, you’ll know the process and the documents you’ll need.
Look for Opportunities
While in many cases the “riches are in the niches” in the case of a pandemic, diversification and multiple streams of income are where it’s at. Now is the time to look for new opportunities.
- New ways to serve your customers.
- New products or services you can offer that are related to what you already do.
- Parallel streams of income.
- Online interaction or digital services you can offer.
If you can take advantage of these opportunities now, you can make them a permanent part of your business plan.
Prepare for a New Normal
For a long time to come, we will be living with the fallout of the COVID 19 pandemic, and depending on the industry, this might mean permanent changes. Your company must be agile and adapt moving forward. It is key to understand that many things will never return to the way they were before COVID.
A “new normal” will emerge for most businesses. To be ready, prepare for flexibility, change, and perhaps a new direction for your business altogether.
Remember the reasons you became an entrepreneur in the first place? Passion, drive, the hustle, and the newness of your business? A change in direction can help you find that passion again.
Revise Your Plans for the Future
What if you can’t get that passion back? What if you can’t find the joy in your business you once had? Maybe it is time to consider selling your business. Selling a business takes time, and if you plan to exit even in the next couple of years, you should start planning now. This might mean you move on to another business, or it could be you are ready to retire.
The key is to do what brings you joy. If growing your business back to pre-COVID 19 levels and beyond is your passion, then you should pursue that. If your priorities have shifted, selling could be the answer.
If you decide you are ready to sell your California based business, contact us today at Rogerson Business Services. We’re here to help.