HBK Lists Initial Steps Businesses Should Take
By James M. Rosa, Principal and CPA, Hill Barth & King
CANFIELD, Ohio — What can you do to help your business negotiate the turbulence associated with the coronavirus?
Some small business owners and operators are concerned about the long-term future of their companies, while others, strapped for cash and operating on slim margins, are more concerned about surviving into the immediate future.
Troubling times can also present opportunities for your business, Keep your long-term prospects and objectives in mind while addressing the things you have to think about for tomorrow.
First things first. Here are few initial steps you can take to put yourself in a better position to limit the damage of what could be an extended period of troubling challenges:
- Assess your exposure areas. How reliable is your current supply chain, your orders for inventory or supplies? Even if your current suppliers look dependable, it is good to identify alternative sources for the products and services you need to do business effectively.
- Examine your sales forecast and cash flow projections. Develop worst case, best case and expected scenarios, and develop strategies for operating under each.
- Consider your strategic initiatives and how you will continue to make progress toward achieving those most important objectives. What can you do to alleviate issues that might arise in this environment that could prevent you from reaching those goals?
- Cost-containment is imperative. Evaluate the risks inherent in your fixed and variable costs. How will you prioritize cuts if you need to make them?
- Determine your minimum staffing requirements. Identify those who are most critical to your business. While you’d like to keep everyone, you might not be able to. Don’t be short-sighted. This environment will eventually turnaround, and you’ll need to have your key employees onboard to propel your recovery.
- Keep aware of Federal and state law changes that can benefit your business. For example, President Trump just signed into law the Families First Coronavirus Response Bill that would provide significant relief through refundable tax credits for paid sick, family and medical leave. Additionally, states are considering incentives to assist businesses deal with the disruption and uncertainty caused by the coronavirus. HBK will provide updates on these federal and state relief efforts.
- Maintain open communications, with your employees but also externally with your customers and suppliers. Be proactive if there are going to be problems, such as late deliveries. Communication is the key to keeping customers satisfied that you are doing the best you can to address their needs.
- Talk to your bankers about access to more resources, like a bigger credit line, to help you through a less than ideal business climate. If you have existing bank debt or loan covenants, and anticipate missing a payment, talk with your banker early on rather than at your reporting deadline. Bankers hopefully will be be sensitive to these difficulties.
- Talk with your HBK advisor for recommendations on mitigating your business risks. The good times of the past years might have hidden some inefficiencies that we can help you address the current business environment and be prepared for recovery.
The author, Jim Rosa, is a principal in the Tax Advisory Group in the Youngstown office of HBK CPAs & Consultants and has been with the firm since 1986. He has extensive experience in personal and estate planning, charitable planning, tax-exempt organizations and individual tax and financial planning.
Published by The Business Journal, Youngstown, Ohio.