11 Tips To Support You In Navigating Your Business During COVID-19
Danielle Lee is a partner & the Chief of Experience Operations at My House Events.
What does this mean? She heads up company finance and operations, and has been so helpful in navigating our own process during this time.
We want to share her story and top tips to support and help you navigate your business during COVID-19.
Before we started to reschedule our spring events, my mind was racing with many questions and scenarios. We would be forgoing our busiest part of the year due to COVID-19 cancellations, so how would this affect us short term and long term? Weddings would still reschedule, but would corporate events? How far would this extend? How would we pay our expenses? The list goes on.
Without letting fear set in, I started to create a game plan to find solutions and figure out the path forward. By following this 11 step plan, I can now say that I feel as comfortable as one can in this situation. I want to make sure that I share best practices and learning in hopes that it will help people navigate their own emergency business situation.
1. Make sure your books are in order.
For many business owners, their books are not their largest priority. Maybe you have a bookkeeper, but you do not really understand what is going on under the hood. Maybe you are “doing” your books yourself but are not really doing them. Whatever your case may be, get them together! Understand your bottom line profit, how much you paid yourself (whether in draws, salary, etc) and how much you paid your employees. If it is not in your books, it might as well not exist and getting access to government relief could be very difficult.
2. Understand your cash situation.
Do you have enough cash in the bank to make payroll and meet necessary expenses for a few months? Do you have outstanding checks that are not accounted for? Dig deep and make sure nothing is leaving that account without you knowing it. This is the time to reserve cash and delay any payments that are not necessary.
IMPT: Keep in mind that cash is not revenue or profit so if you have taken deposits, you may need to pay these back based on your contracts if you do not perform your services.
3. Model out your revenue for the rest of the year.
Are you losing your revenue for these current months or delaying it into the second half of the year? Create a rough model of what your situation will be like for the year. Once you do this you will be able to effectively plan. For our team, we modeled out all our contracted events that have moved, our fall events, and then all of the events in the pipeline with the probability that they would close. This gave us a good runway to then create different cost cutting scenarios and see how they affected the bottom line.
4. If you have a team, be transparent.
You can show them your scenarios and this will help them understand the overall financial situation and the necessity to maybe cut costs or salaries. On our team we plotted out 13 different scenarios that would impact everyone and had a meeting to chat through the implications. The different scenarios involved cutting salaries, new budgets, different revenue targets, and what this could also look like if we received aid. Going through all of these scenarios helped our team understand the situation we are all in in a much deeper sense.
5. Cut your expenses!
This is the time to take a magnifying glass to your expenses. Do you have subscription services? They add up. When our business is booming we do not get as deep into looking at these things, now is the time to start cutting things out. Here was our rule of thumb, if we are not using it now, freeze it or get rid of it. If we need it when our business is back to normal or helps us generate revenue (proposal software, CRM, etc) keep it!
Photo by Rasharie Brown.
6. Know your government relief programs.
Start to become well informed on the difference between the PPP (payroll protection program), EIDL (Economic Injury Disaster Loan), unemployment and the Employee Retention Tax Credit.
Here are some BRIEF notes:
PPP - up to 8 weeks forgiveness of payroll - yes, being self employed counts! This will be rolled into a loan for those amounts not forgiven, but if used correctly, it will be forgiven. We know that the original amount allotted for the program has been exhausted, but we are hoping that more is put into the program and if so, you want to be at the top of the queue.
EIDL - this is a loan at 3.75% interest rate, but some people have been getting advances of up to $10K that is forgivable.
Employee Retention Tax Credit - this gives you tax credits for your employees when you are back up and running, better for restaurants or businesses that are not in operation now, but will be when this is over.
7. Apply to your relief program and make a plan (all while keeping in mind that plans are constantly changing and have to be reassessed).
After you know your financial situation (tip #3) and what your new expenses are (tip #5), decide which plan you are going to go with!
For our team, we modeled out different scenarios and what they would look like at different revenue targets. We used the revenue target we felt was conservative and attainable and decided that for our team and the time being we would use the PPP. If approved, it buys our team another 8 weeks to see where this storm is taking us. This is a HUGE relief. (Update: We are waiting now to see if this is replenished and what other funds may be available to people.)
8. Get inventive with revenue streams.
We know that in the short term we cannot hold weddings and other mass gatherings and that it might take awhile before we are there again. Hence, what are we going to do in the meantime to keep our business relevant on the party goer side. We have started to put together drop off packages and float different ideas by our chefs. We are thinking outside of our normal box to service customers.
9. Get Involved.
It’s an important time to give back or get involved with your community right now (within your business’s means of course). See how you can get involved. We know there is a lot of need right now to feed the front line, so that is where we saw our opportunity to get involved. This also felt extremely relevant because it supports our mission. We are working with Chef's Brigade to schedule an all women line up of chefs and restaurants and are working to expand this.
10. Take some deep breaths.
This is not easy for anyone. It is going to take some time, but we are all pushing strong to get through this. As a mom with a 2 year old at home and a husband who is also working from home, the stress of it all is a lot. (For those that have multiple kids at home right now, I am in awe!) Going for a long walk, running, or just sitting alone and breathing has really helped. I urge you all to take the time for yourself to process and de-stress as much as we can.
11. Call/Email Me!
Have questions or need to figure something out? I am always more than happy to chat. Just remember - there may be a 2 year old putting in his two cents as well! :)
For the time being, I am constantly checking in on our plan, but we are staying the course and being inventive with other revenue streams in the time that we cannot have weddings, corporate events, and other mass gatherings. I am also thinking of the moment when we can all resume our normal jobs, see each other, and how joyous that will be!
For more industry info and resources, check out this podcast that we co-produced with Oyster Sunday and Indepth Media titled “We’ll Be Right Back”. You can find the show on Apple Podcasts, Spotify, Stitcher, Google Play, Anchor, TuneIn, YouTube, virtually anywhere podcasts are found!
