Important Financial COVID FYI's
What should we take away from this crisis?
I know that we haven't seen the last of infections and deaths from this virus yet. But I think it is not too early to talk about what to do now --while we are still shut down-- and what to do when the governments let us get back to business. All indications from the Federal Government and most state governors is that we will start phasing businesses back starting next month. So, what to do until then?
First, and most importantly -- all of you should be applying for the SBA PPP loan being offered by the Federal Government. They are willing to give you 2.5 times your average monthly payroll. This is a loan that can be turned into a grant (wherein you don't have to pay it back) if you meet the loan requirements. Once you get your loan proceeds, you simply continue to pay your employees their normal pay (don't lay anyone off); pay your rent: and pay your utilities for 8 weeks. Do that and everything you paid towards those 3 things is forgiven from the loan.
The requirements and approval process are not long and hard like most loans. Contact your bank, not the government. Your bank can step you through the process. Getting this loan is the most important thing you can do right now.
Most of your installers are subcontractors, not employees. And since you are not likely or able to keep your installers busy right now, you should also remind your subcontractor installers (the ones you like), that they can apply for this loan/grant too. Most of them are self-employed and have organized a business. These one-man businesses, including Sole Proprietorships, can get relief also.
Second, while this loan/grant will help you keep your doors open and keep your trained employees with you for a few months, start planning for the future. Long-term plans should include a more conservative approach to capitalization. Just as individuals should have at least 3 months of expenses saved as an emergency fund, you should mirror that in your business. Look at your P&L Expenses total. You should work toward having at least 3 times that amount in a business savings account. This will protect you from sudden market changes like the one 12 years ago, and the one we have right now. Limit spending and don't buy anything big or go into more debt until you get there first.
Third, when things are slow like they are now, this is the perfect time to work on your business instead of in your business. Get QFloors working for you. No matter how long you've had it, or how much you've already done, you can do more with the system to make you more efficient when things get busy again. Now is the time to prepare. Don't let this difficult experience go to waste. Remember, we’re in this together and we are here to help.