There is no doubt about the economic damage inflicted by COVID-19.
It has wiped out the savings and growths in investment portfolios, bashed the seniors by wiping lifetime savings and gains in their RRSPs on top of health issues, sent the non-essential workforce to home, and put the existence of many businesses on risk!
This is all too scary! In such circumstances, positivity in attitude and motivation are the first to go out of the window. As one of my clients mentioned to me that whenever he is trying to wash down the unseen-virus in the shower he feels that all his positive entrepreneurial spirit is going down the drain along with. Well, this might be an over-exaggeration for a lot of us but there are many amongst us where negativity is taking a serious toll.
COVID-19 crisis and work-from-home arrangements are expected to last for a couple of months but this is going to be over. It might open up earlier than expected if stay-at-home resulted in success in the fight. There are many things which entrepreneurs or small business owners can do to ensure that is prepared for a quick recovery once it is all over.
1. Analyze your current situation and put up a recovery plan
Reflect on your past performance and current situation. If there are immediate risks, take some mitigating steps and plan for the recovery. If you are facing any temporary issues especially related to the financial situation, many options are available at your disposal. Higher the level of preparedness, the faster the recovery will be.
2. Expand your online presence, interaction, capacity and reach
No doubt, the only winners in this crisis will be those with online communication and interaction tools.
Online interaction and collaboration
By this time, it will be reasonable to assume that you must have already developed somehow online collaboration and remote working technological tools. If not, this should be your focus. Use this time as an opportunity to implement to develop a CRM, project management system, and other communication options.
Expand your Capacity and Reach
Since there is more time available to you while staying at home. Devise a new social media marketing strategy or spend some time working on Search engine optimization for your business. If you already having a website give it a makeover or develop one if you don’t have. One of the issues faced by small businesses during this crisis was that their websites and systems were not able to handle the extra load. For example, one of our clients reported that his website kept on crashing due to extra users and he had to move from shared hosting to a VPS. Research, analyze and implement improvements in your existing systems to increase their capacity to service more user customers. At the same time, using digital marketing expand your reach to more and more customers. You might not get an instant return but it will contribute significantly in the coming period.
3. Take advantage of wage subsidy by government and hire employees
The government of Canada has announced Canada wage subsidy for employers where businesses can take benefit of either a direct payment from the government or deduct from remittances depending upon their eligibility. If you see a drop of more than 30% in revenues you are eligible for a 75% subsidy. If you are, take advantage of this! What can be better than hiring human resources at 25% of their market price? There is no restriction on what workers can be hired, you can hire anyone and they can work from home too. An added advantage will be you and your team will be ready to pull through recovery at full throttle.
4. Take advantage of Tax deferrals
There are tax deferrals for both corporations and self-employed individuals. These otherwise payable funds are now available. You can use these funds to pay 25% of payroll cost to hire quality resources, perform a system upgrade, launch a marketing campaign and much more.
5. Utilize new credit facilities and take advantage of lower interest rates
In order to increase the money supply, interest rates are lowered to the minimum. You can take advantage of these lower interest rates and plan expansion during this slowdown. Canada Emergency Business Account (CEBA) is a government initiative in partnership with your local business bank. Startups and aspiring entrepreneurs, or businesses with less than $50,000 payroll in 2019 CEBA might not be available but there are a lot of other options such as BDC and EDC programs. In short, Credit is easy and cheap nowadays!
6. Invest in your skills and education
While you are working from home and commute time is cut to zero, learn some new skills especially if you are in a profession like professional services or the creative industry. This can turn out to be your best investment with an ultimate higher return in the future.
7. Write or update your business plan
If you are an already running business, its time to review your business plan. Review your business plan and update it. Factor in the current macroeconomic issues in your forecasts and financial projections. If you are planning to start a business you can start with business plan writing for the startup. You have more time with less disturbance.
The key to passing through this crisis lies in a positive and optimistic attitude! So, stay positive.
Interested to join the discussion and contribute your thoughts?
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COVID-19 has affected many small businesses and entrepreneurs.
Read the below two posts:
1. Lessons small businesses…
Maroof HS CPA Professional Corporation is a CPA firm providing tax and accounting services for small and medium businesses in Canada. Get in touch with us.