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5 Biz Mantras to Get Your Company Through COVID19

Business practices that are key to making it through the coronavirus pandemic

As COVID-19 slows the global economy to a trickle, small business owners are struggling with cash-flow issues. With 76% of businesses negatively impacted by this pandemic, no industry is immune, and business owners may not be paying themselves, at least not a fair market wage for the type of work they do and the hours they put in as they focus on survival. Over the fifteen years in small business, investor relations, and real estate, I developed what I call “The Mirza Mantras”.  Business practices that are used to weather storms like this one.

My key tips:

1. How to conserve your cash. Why cash is King during a crisis

The COVID-19 Pandemic has placed such a strain on the global economy that a depression level event is a real possibility. U.S. dollars are in particular demand as borrowers around the world start to pay a premium to obtain U.S. dollars in a world of uncertainty.  The first thing any business owner needs to do is make immediate adjustments to their business plan to improve profit margins and lower cost.  All small businesses should look to their profit and loss statements and assess profit margins based on individual categories within their company and identify areas of waste or unnecessary expense to remove from operations and increase cash on hand.

2. Avoid Getting Burned by your Burn Rate

The next step would be to ensure that money begins flowing into the business at an accelerated rate. Strategies include asking customers for a deposit or partial payment up-front, or begin sending early and more frequently.  This goes hand in hand with the first point regarding Cash Being King. In crisis situations, the burn rate would be measured in weeks, days, and sometimes hours. Business owners need to evaluate their cash consumption and validate whether their actions on conserving cash is making the company self-sustaining.

3. Identify Small ticket changes that can improve your P&L significantly

Sensing a theme? Once you identify your burn rate, the obvious choice would now be to look through your profit and loss statements. Identify which smaller cost items you can do without, permanently and temporarily. Most business owners can save up to 20% by simply eliminating non-discretionary costs.

4. Mastering crisis communication. How to speak to lenders, landlords or property management companies to request a forbearance or other payment plans

In these times of crisis, it is vital to ensure credit lines, as well as ensuring your credit rating.  Show your creditors the steps you have taken to ensure the viability of your company.  Research different relief packages, grants, and subsidies you would be eligible for and work with your creditors. Utilize all the resources both the government and your creditors may be offering. If the help is out there, don’t be afraid to ask for it.   Remember that the goal is to come out stronger on the back end!

5. How to avoid relying on banks for loans. Ways to plan ahead by creating a business savings account to ensure cash on hand

Smart business owners will have a business savings account.  As you move to cut costs and increase cash flow, it is paramount to put away these savings.  Use your checking account to pay for items you need while keeping the bulk of your funds in savings.  

As the leader in your organization, you’ve probably already endured that initial wave of panic and concern among your employees and from your customers.  Strong leadership should always be a priority for any organization, but it’s especially important to have a unified, consistent leadership front during a crisis and sticking with “The Mirza Mantra” should help you remove the emotions that may drive their perceptions and decision-making.  

Business leaders set the tone and the vision.  Remember to only try to control what you can, communicate how your organization plans to deal with COVID-19 related issues, and be honest with everyone internally and externally.   

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