In this episode of Coffee with Carl, attorney Carl Zoellner explains some of the timing concerns small business owners should consider when planning for post-COVID-19 business operations.
Updated October 6, 2020
Continuing in my COVID-19 series, today I want to cover issues surrounding timing. We’ve already covered different options to help small business owners survive, including the stimulus checks for those who earn below a certain threshold, loan deferrals, government-sponsored relief programs, Tax Code provisions to help make it through this time, as well as alternative financing options. But the big question on everyone’s minds right now is: when will things get back to normal?
Most of us have a general understanding that we’ll make it through this — this, too, shall pass. But we don’t know how long it’ll take to get back to our normal lives, or the “new normal” that our daily lives will look like in the post-lockdown world. When small business owners encounter disasters like the coronavirus or even more localized regional disasters, one of the important factors to consider is timing. By this, what I mean is that it’s important for small business owners to buy themselves and their businesses some time.
Everyone has been affected by the coronavirus pandemic, and everyone’s small business has been affected in some manner, too. In my experience working with our clients here at Anderson, who are mostly small business owners, I’ve seen this international shutdown play out in two main ways. I either see that clients’ businesses have been drastically affected negatively, causing a slowdown or total halt of their business, or clients’ businesses are being maxed out and are running over capacity at the moment in an attempt to keep up with a surge in demand.
In either scenario, the question of timing is highly relevant. It’s critical that you find the route that buys your small business the most time. Buying time for your business will allow it to survive until it hits that leveled-off point where business gets back to how it ran pre-coronavirus.
As state governors begin releasing guidelines for reopening, it’s possible that brick and mortar stores, such as shops and restaurants, will see a huge resurgence in demand. These physical businesses may see an influx of people who’ve been cooped up in their houses and are excited about getting back out. Alternatively, it’s also possible that the return to normal is a slow trickle instead of an influx of business. This is why timing is so important here: because we’re hedging against the unknown.
Ultimately, small business owners should consider all the available options to them to make sure that they buy their business enough time to ride this out — whether that’s one month or three. Using opportunities to defer payments and other ways to hold onto more cash right now may be the best thing for a business to ensure it can survive this period.
Everyone will need to find the right combo for their small business between alternative financing, government relief programs, and loan deferrals. I recommend working with professionals in this arena to make sure that you have all the information about your options and the various repercussions of each. We all have a tendency to zero-in on the narrow issues we’re aware of, which can prevent us from seeing the bigger picture and putting it all together. Working with professionals who know the options and how they play out is the best way to make sure you choose the right path for your business.
If you’d like to speak with a professional about your funding options to buy your business some time, schedule a complimentary Strategy Session now. On the call, you and a Senior Advisor who specializes in funding will break down the options and verify the best route for your business. You can schedule online or by calling 888.871.8535.
Watch as Carl goes over the timing considerations for small business owners during the coronavirus (COVID-19) pandemic.
Resources mentioned in this video
Subscribe to Anderson Advisors on YouTube for the latest business & tax planning strategies
Schedule your complimentary Strategy Session to receive your free Wealth Planning Blueprint
Got an idea for a future Coffee with Carl? Send it to Carl at email@example.com.
3 Steps to Create an Invisible Investor Strategy
The greatest mistake that people make when it comes to asset protection for real estate is not understanding the risks that are waiting out there for them. This eBook reveals the structure you should follow to ensure your hard earned money is protected from frivolous lawsuits and costly tax mistakes.