Covid19 has had a profound impact on businesses around the world. While we’re all looking forward to life after lockdown this “new normal” is proving a challenge for many businesses. Business owners may find that they need to adjust and reassess their finances, their way of doing business, and how they operate going forward. For some, this may herald a time for change as they reopen and start to recover the time and ground lost over the past number of weeks so we’ve compiled a checklist for business owners of 10 keys tips to reopening your business.
Cashflow is the Lifeblood of Your Business
You should have a cash flow plan for the next 2/3 months when you open and keep track of what cash you receive and what cash you payout. This will show your business’s cash position at the end of each month and give you a better idea of how you’re doing month to month and where, if necessary, you need to make adjustments. Failure to exercise good cashflow management may result in the need to borrow more to remain viable thereby pushing the business into further debt. Try to predict your cash flow at the start of each month and review it at the end. You need to understand your business’s cashflow, how it impacts your profit and what you need to improve it.
Preserve Your Working Capital
As with your cashflow review your working capital at the start of every month. If you haven’t stopped any unnecessary expenditure already now is the time to do it. How can you monitor and use your current assets and liabilities to the best effect?
Consider your cash management, inventory management, and accounts management to plan your working capital.
Utilise This Time to Review Your Processes
One of the keys to success in just about every sector is good financial planning and management. Have you considered a consultant to help organise your processes to your best advantage?
Have a look at Paula McNicholas of Lean Business Strategies or someone similar if you need to re-energise your business.
Have You Reviewed Your Own Finances Recently?
This crisis has put things into perspective for many of us. Do you have enough in the bank to get through this? Are most of your finances tied up in the business? What happens if you have to close? What happens if you get sick? To what degree do you expect the business to form part of your assets? How do you view your business in the context of your overall financial priorities going forward?
Now is the time to review, not just your business, but your own personal priorities and put the necessary safeguards in place to ensure you can weather any future crisis that life might through at you and put the measures in place to achieve your ultimate goals.
Avail of Government Supports
There is an array of supports out there from the government for small businesses to help them get back on their feet, embrace technology and build an online presence. Avail of LEO supports such as Mentoring programme, business continuity voucher, etc where you can. It’s a great resource.
Review Your Insurance Policies
Take the time to carefully review all existing insurance policies to determine whether they are adequate or not for your business going forward. Things have changed a lot in recent months and this may have created new situations that may not be covered under an old insurance policy.
Make sure you have the right protections in place for you and your business? Review exactly what policies you have in place? Are they sufficient for your business? What are the potential risks going forward? Can you get a better deal?
Having a business contingency plan has never been so important. What would happen to your business partners if you died prematurely?
Be Cautious About Deferring Payment on Loans and Payments
Deferring your loan payments to your bank is just that a deferral of the inevitable. it’s not a cancellation of the payment, unfortunately, and will have to be paid back so if you’re cash flow is in good shape you should continue to repay your loans where possible.
However, if your cash flow is not so good, look at what you can defer and for how long. Talk to your bank and see what they can do for you. Don’t bury your head in the sand!
Be Wary of Taking on Additional Overheads as You Start to Generate Revenue When You Reopen
Be careful, overhead costs can quickly become a drain on business revenues especially in the first few months of reopening. Take the time now to calculate your overhead costs and look at ways to cut back on these expenses where you need to. Review everything thoroughly and create a saving strategy. Only spend what you absolutely need to particularly over the first 2/3 months.
Look at How You Can Minimise Your Tax Payments, Legally
There are many legitimate ways to reduce your company’s tax bill. For example are you aware that it can be a significant tax advantage to employ a spouse or other family member provided that you can create and justify their role within the business? You can also minimise your corporation tax bill whilst maximising your pension if you make a contribution to your pension prior to your company’s year-end, this will reduce your assessable profits which in turn reduces your corporation tax bill.
We’re all aware that many of Ireland’s most successful business people pay the least amount of tax, that’s because they know that tax is a business cost just like any other and this cost can be managed and reduced with proper planning and advice.
Be Realistic About Your Business Prospects.
Be positive but be realistic too. Don’t put your head in the sand. Assess your circumstances, what you need, and ask for help if you need to. Can you get through the next 5/6 months? Do you have a contingency plan, do you need to review it? Have you exhausted all potential growth opportunities for your business? Contact us to so that we can put you in touch with one of our partners?