How to Work on Your Small Business Finances During the Coronavirus Pandemic
As the coronavirus situation continues to impact the small business community, business owners are facing unprecedented financial challenges as they adjust to a new normal. Businesses have had to make major adjustments to their business models to continue operating even as customers are staying home.
One of the biggest challenges that business owners are facing right now is determining what their customers want and expect from them in the future and where their future revenue streams will come from. Will they be going back to the way things were before the coronavirus, or will they have to adapt their business to account for permanent changes in consumer behavior?
For all of the challenges this pandemic has created, there is also a rare opportunity for business owners to evaluate and work on their business so that they not only survive the pandemic but are ready to be even stronger in the future.
Opportunities to Evaluate Your Small Business Inventory
Before the pandemic, everyone was busy with day-to-day operations and taking care of their customers. With business slower, this is a good time to evaluate your small business finances and really take a look at your financial statements to identify any opportunities in your product or service offerings.
Look at your small business inventory and identify products that you are holding onto longer versus items that are selling quicker and are more profitable. From there you can determine if it’s possible to put more emphasis on the products that are selling quicker while scaling back or eliminating products and services that are not making money.
When times are good, businesses tend to buy and pay for products that make running their business easier but are not necessarily essential to production and revenue. It may be time to re-evaluate what you have and determine if all your equipment is profitable for the business. If you find you have some equipment that isn’t useful anymore, you may be able to sell it and add some additional cash to the operation.
Buy Low, Sell High
Costs and interest rates are relatively low right now so if you are in a good cash position, this may be a good time to expand your business. There may be an opportunity to consider adding a new line of products or services that you haven’t had time in the past to truly consider. Or maybe you have been considering moving to a new location, or renovating your current location, but haven’t had time to spare while taking care of your day-to-day operations. This could be a good time to pull the trigger if you are in a good cash position.
Expanding your business while the economy is slow and costs are low ensures that you are ready to hit the ground running when the economy gets back into the swing of things.
Work with Your Banker
You don’t have to make these decisions alone. Use your banker as a sounding board to communicate what’s going on in your business, what your challenges and concerns are and what opportunities are available to you. Commercial bankers at Northwest Bank have access to many resources across every industry. Whether you’re thinking about working with a new CPA, are looking for a marketing source or you need to change your merchant services provider, a commercial banker can get you connected with the right people.
As mentioned earlier, interest rates are low right now. A commercial banker can help you look at options for refinancing or restructuring debt to help you drive down your monthly payments and improve your cash flow situation. Or if you are in a good cash position, you can look at options for paying down some of your higher interest rate debt even faster.
To learn more about the opportunities available to you and your small business, contact one of our commercial bankers today.
Small Business Financing for the Next Step
You’ve worked hard to build your business. Now make sure it continues to thrive. Local businesses are vital to the community, which is why helping yours grow is our priority.
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