Keeping a business afloat during the best of times may feel like a straightforward task. Keeping that same business afloat during an economic slowdown could be challenging.
But maybe that phraseology can offer you a solution during your business’s current situation. A slowdown could create the opportunity for you to slow down from the daily rush and evaluate the long-term prospects and search for growth opportunities within your company.
Of course, there’s still the matter of maintaining cash flow through the economic downturn to make sure you continue to strive in a recession and come out prepared on the other side.
Surviving the Slowdown
A survey of small businesses conducted in late March and early April of 2020, by the Proceedings of the National Academy of Sciences, found that more than half the businesses expected to close by December 2020 if the pandemic lasted four months or more. That number dropped to around a quarter if the shutdown lasted only a month.
One concerning number from the survey showed around half the small businesses only had enough cash on hand to pay two weeks of payroll. That number explains why the number of layoffs and furloughs plunged the economy into distress so rapidly and dramatically.
The passage of the CARES Act with its stimulus checks, expanded unemployment benefits, and Payroll Protection Program softened the impact on the economy, but the pandemic has revealed the precarious nature of small business and pointed out how they need fast access to cash.
Consider Fast Business Disaster Loans
While mid-sized and larger businesses might be better prepared to survive an economic slowdown, they could also find themselves putting growth plans on hold or passing up opportunities to expand or acquire a competitor if cash flow has tightened.
If this is the situation facing your company, online lenders such as LQD Business Finance, provides quick business loans not available through traditional lending institutions or through investor growth strategies, both of which can be drawn-out processes that could stall your growth plans.
These disaster loans serve as a great bridge while your company weathers the economic downturn continues to build out its long-term strategy, and positions itself to become a leader in your industry moving into the next economic growth cycle.
Let’s look more at those strategies for moving ahead through the slowdown and beyond:
Take Advantage of PPP Loan Forgiveness
If the Payroll Protection Program has been part of your strategy to survive the recession, you now are entering into the all-important phase of ensuring your loan can be forgiven so you’re not straddled with that extra debt.
The Small Business Administration has provided guidance on when you need to apply and what portion of your loan can be forgiven.
While the name implies the PPP applies to payroll, other expenses incurred by your business also are eligible for forgiveness, such as rent/mortgage, utilities, insurance, etc., as long as you meet the percentage requirements for the portion used for payroll expenses. Of course, those payroll expenses can also include such costs as employer share of taxes, health insurance, and retirement benefits.
Completing all of these calculations correctly will be vital to your success in seeking a PPP loan forgiveness, which is why LQD Business Finance has created the PPP Loan Forgiveness Platform to simplify the process and ensure the greatest accuracy so your business gets the maximum forgiveness and avoids future audits. The LQD PPP Platform provides both a free and premium version to best serve your business’s needs.
Shaping Your Business Growth Strategies
As we mentioned earlier, the economic slowdown also creates an opportunity for you to slow down from meeting the day-to-day operations to assess where your company stands today and create a comprehensive strategy for moving into future growth cycles.
The areas you’ll want to evaluate will vary greatly depending upon your business.
Is inventory a necessity in your business? Have you managed your inventory well in the past? Has the landscape changed because of the pandemic? Will online orders change your business model? Can big data help you better predict and plan for your inventory needs? Is there a way to produce your product(s) on demand? If you can reduce inventory, can you save money on expensive storage space? Getting a handle on inventory control creates an opportunity for you to create a cash flow advantage for your business.
Is payroll a greater concern for your company and its way forward? Oftentimes growing companies hire to meet immediate needs, then find themselves with staffing imbalances as the company changes directions or moves forward. Now would be a great time to conduct a full staff evaluation and determine if your current employees are also the employees you need to drive growth after the economic downturn.
In the same vein, is your management structure and team aligned with your growth strategy? Startup companies in particular often face a dilemma when leadership needs’ transitions from the enthusiasm and grind of getting off the ground to adopting a stable and mature growth pattern. Sometimes it’s even the founder who doesn’t have the skills or desires to act as CEO of a midsize or large corporation. You need to determine if your leadership team has the proper skills in management, operations, marketing, and sales.
Finally, examine other portions of your budget to determine which fixed costs or variable costs need to be addressed. Are your suppliers getting you the best deal for your dollars? Can you reduce storage costs with the packaging on demand? Are their options to meet utility demands with more sustainable and budget-friendly options long-range?
Get Quick Capital to Pave the Way for Your Future
Once your team has taken the time to complete a full analysis of your business strategy and mapped a new route forward, consider how the dynamic business finance options from LQD Business can allow you to position your company to zoom ahead of your competition coming out of this economic slowdown. Contact our experts today to learn more about the advantages created by fast business loans.
- Small Business Relief