Consider the tips below to help preserve your small business’s cash.
Press Pause on Large Purchases
If you’re a small business owner, you’re likely facing a lot of unknowns in response to COVID-19. When the future is uncertain it’s important to hold off on making big purchases, if at all possible.
Pay Bills Slowly
Pay your bills as they are due – not necessarily the moment you receive them. Review the full payment terms for each bill and issue payments as slowly as you can without facing penalties. This strategy will help you hold onto as much cash as possible for as long as possible.
You should also reach out to any suppliers, landlords, or lending institutions to ask about modified payment terms. Banks may be able to offer interest only payments or no payments for the next few months.
Contact Your Insurance Agent
It’s important to get in touch with your insurance agent to bring them up to speed on your current situation. As we discussed in our Reducing Operating Costs Through Insurance Changes webinar, there may be changes you can make to your policy that help reduce ongoing operational costs.
Your existing inventory is the equivalent of your cash sitting on a shelf. Do you have planned inventory purchases in the pipeline that you can cancel or postpone? Reducing the amount of inventory you’re sitting on is a wise strategy when the future is unclear.
With the inventory you do have on hand, consider ways you can get creative. It may be possible to return or exchange it with a vendor. You may also be able to offer new discounts or incentives to get customers to purchase the existing inventory.
Evaluate Payroll Expenses
Staff teams at small businesses can often feel more like a family. These close connections can make it extremely difficult for business owners to manage payroll in times like these.
While owners are obviously reluctant to lay employees off, unprecedented times may call for uncomfortable actions. You should be postponing all new hires, considering reducing hours, and evaluating essential versus nonessential employees.
Find more resources about these difficult decisions in our COVID-19 Forced Unemployment webinar with the Missouri Job Center.
Reach Out for Help
Our team at the Missouri Small Business Development Center at Missouri State University is here to help business owners navigate these uncharted waters.
You can schedule a confidential, no-cost 1:1 meeting with a member of our consultant team. You can also find COVID-19 response resources, view webinar recordings, and be part of upcoming virtual events to learn more and get your questions answered.