The COVID pandemic has changed the ways that people do business. Business owners today need new strategies to survive and thrive in a post-COVID world. Part of thriving is having a concrete plan to avoid bankruptcy. Our Las Vegas bankruptcy lawyers have 16 tips for safeguarding your business from bankruptcies in a post-COVID world.
1. Begin With the Books
In order to wisely manage your company, you need to know precisely what your assets and debts are. Review your books. Look at where you’re bringing in income and making the highest profit margins. Identify any receivables that are still pending. Examine your debts. When you understand your business activity, you can make strategic decisions that safeguard against bankruptcy.
2. Plan for Receivables
Any business has to plan for when things don’t go the way they should. Not all customers are going to pay. Not every shipment is going to come in on time. Evaluate these situations. Identify when they are most likely to occur. You need to work around them to keep operations going and create a plan to respond appropriately with the other party involved.
3. Prioritize Debt
Most businesses carry at least some debt. Having a strategic plan for how to pay these debts can help the strength of your business. Tax liens need to be paid first. Then, managing secured debt is critical to business health. While it’s best to avoid unsecured debt altogether (credit cards), negotiating the best interest rates and shopping around for the best terms can still be a boost for your business.
5. Communicate With Customers
Customers want to know exactly what is happening with your business. If protocols have changed for visiting in-person, your clients want to know. When there are changes to accounts or new, flexible options, making sure your customers know about them can keep them loyal to your business. Your customers want to know how they can continue to enjoy your company’s products and services.
6. Communicate Clearly With Employees
Just like customers want to know exactly how your business is operating differently in the post-COVID world, employees want to know, too. Employees want to know if hours have changed and if procedures for running the company have been altered. If there are processes that they need to be doing differently because of COVID, clearly and thoroughly communicate these expectations. When circumstances change quickly, it can create confusion among employees. Get ahead of it by making sure employees understand exactly what is expected of them.
7. Stay Up to Date on Legal Changes
State and local laws relating to the pandemic have changed quickly, and they will continue to change on short notice. Making a mistake in the regulations can be costly if you’re assessed an unexpected fine. Be aware of legal changes that may require you to shift your operations.
8. Don’t Overdo on Overhead
The pandemic has made it a challenge for most brick-and-mortar operations. It may not be the time to make a large investment in a physical location, not knowing how much you will be able to use it in the short-term and long-term. Another place to be conservative is business travel. Investing in technology to allow your employees to work and communicate effectively from home may be a smart way to get more done with less of a commitment to future costs.
9. Cater to Essentials
Think about how your own purchasing behavior has changed during COVID. Are you purchasing groceries like you used to? Are you shopping online more? Have outdoor recreation options taken the place of going to indoor spaces for entertainment and recreation? Now think about how you may change your business to offer more things that people consider essential in the post-COVID world.
10. Flex Like Never Before
Just like COVID has changed how businesses run, the pandemic has also altered family life. Children are attending school remotely, many for the first time in their lives. Your workers may need to help elderly parents shop for essentials. Employees need flexibility in order to meet these demands. Finding ways for employees to meet their needs can help them be more productive and stay with your company.
11. Work With Health-Conscious Companies
The health of the companies that you work with can impact your own company’s health. When you do business with healthy companies, you’re more likely to have complete and reliable business transactions without interruptions. Investigate the companies you do business with, and stick to companies that can deliver on their agreements.
12. Increase the Rainy Day Fund
In a post-COVID world, a healthy rainy day fund is more important than ever before. Plan for a larger emergency fund than you may have had in years past.
13. Review Insurance Policies
Now is the time to look at your insurance policies. Are you paying for insurance that you’re not using? Are there places that you can cut back? While you’re investigating, also look at what your insurance covers. Does your business interruption insurance cover a situation like COVID? Take the time to read the fine print and make sure you’re buying enough, but not too much, insurance.
14. Ask for Customer Input
Customers who love your products may have some of the best ideas. Open a line of communication with your customers. Ask if there are ways that you can serve them better. You may be able to hang on to accounts and even increase your client base with new terms, options and offerings.
15. Update Your Digital Presence
Potential customers will base their buying decisions on your online presence more than ever before. In fact, they may hold off on visiting a brick-and-mortar store until they’re ready to make a purchase. Make sure that your products and services are clearly advertised online. Your customers want to be able to get to know your business as a brand and learn about the products and services you offer before they ever step foot in the door.
16. Find Financial Support
There may be multiple ways for your business to find financial support to avoid bankruptcy post-COVID. There may be small business grants and loans available to you. If you find yourself financially overwhelmed, there are options to explore, like the Small Business Reorganization Act of 2019.
The law helps small businesses take advantage of some of the reorganization opportunities that have helped big companies for years. Understanding the options that you may have can help you make smart decisions and help your business thrive in the post-COVID world.
Do you have questions about your options for reorganizing your business? Contact our bankruptcy lawyers in Las Vegas today for your free consultation.