Save Your Small Business from Bankruptcy During the Pandemic with these Smart Moves
The coronavirus pandemic proved to be fatal not only to people but also to numerous businesses. In fact, it didn’t even discriminate as both large corporations and small businesses are feeling the negative effects it has on the economy.
If you’re one of the many entrepreneurs worried about the possibility of your company going bankrupt, here are some moves you can make today to prevent just that.
Apply for a PPP Loan
One thing you should take advantage of during this time is the government’s Paycheck Protection Program (PPP). The program specifically grants loans to businesses that employ fewer than 500 employees.
So far, the PPP has handed out around $210 billion in loans to 860,000 approved applicants. You can apply for a loan for business expenses like payroll costs, rent, and utilities over a two-month period.
Collect Outstanding Money
Another way you can get some extra funds while profits are low is to start collecting money from people who owe you money. For example, you can choose to bill a customer for the finished portion of their order instead of waiting for the entire project to be finished and then sending them the invoice.
Asking for prepayment of a future activity is another thing that experts like Harvard Business School fellow Karen Mills recommend.
Cutting Down Staff Costs
Of course, small business owners can also resort to reducing their staff by laying off people or putting them on furlough. Another thing you can do is make some pay cuts to the salaries of your remaining employees.
Making these decisions doesn’t mean that your company’s productivity should necessarily slump though. Think of ways you can get the most of your smaller workforce by working longer hours or working online.
Renegotiate with Your Vendors
Just as lending institutions might be more understanding of borrowers due to the economic downturn, your vendors might be more open to renegotiating contracts and payment terms these days.
Contact your suppliers and landlord to see whether you can arrange something regarding any outstanding payments you’re supposed to make. Chances are high some of them would accommodate your requests as they have an interest in keeping you in business.
Of course, it’s also important to look forward to better days to ensure the survival of your business. Think past the pandemic and remember to continue treating your customers well to make sure they stay with you.
Make sure to keep them updated on the status of your business on social media or in person.
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