There are a number of things you can do to reduce the impact of the Corona virus on your business.

Short-term there are subsidies and actions to minimize the damage while long-term you may need to rethink how your business operates.

A business usually gets some advance notice that all is not well: sales start to fall, customers drift away and the demand slows. With the Covid-19 virus there has been an almost immediate shut down where sales for many have gone to zero overnight. If this is you then:

• Calculate your weekly ‘burn rate’ (all overheads you have to pay even though you’re not operating)
• Include any financial relief you’re able to get from Government and other sources
• Divide the burn rate into the cash reserves you have (or want to commit)
• This gives you the number of weeks you have left before you run out of cash without any other changes.

Once you know your timeframe to make changes you can prioritize what to do next.

Extending the window

Assuming that the current situation is temporary and that eventually business will return to normal, there are actions you can take to keep your business.

Increase your cash reserve.

Apply for Government assistance (see next section).

Look internally to reduce the cash burn

Try and reduce the weekly costs, for example:

• Cancel unused subscriptions or switch to lower plans for services
• Negotiate discounted lease costs with your landlord
• Get rid of any excess stock (sell online if you can)
• Sell any unused assets
• If you feel your business cannot recover to previous levels you may need to make some staff redundant. Try and avoid this and seek legal advice
• Check your business interruption insurance to see if it covers any shut-down loss

Delay payments

If you can try and defer any payments the business needs to make.

• Ask your suppliers if you can delay any existing accounts due payments or set up a payment plan in the future
• Delay any immediate payments to the IRS if you are able to
• Identify all your major costs and contact them directly to negotiate a delay. It’s better to communicate late payment than not paying at all
• Use a credit card to push smaller payments further out

Increase access to cash

If you have existing cash reserves or savings/equity elsewhere then you may need to dip into these funds to ride out the storm. You need to weigh up the options; find the money any way you can to keep the business intact until the situation recovers (which it will) or close the doors and walk away (with all the legal implications that carries).