The Coronavirus crisis has created a unique landscape with respect to distressed companies. Historically, companies that are experiencing significant difficulties are advised to keep the company’s financial circumstances secretive because openly discussing your company’s struggles with creditors, like landlords and lenders, suppliers, and/or vendors could limit your ability to secure credit or do business. However, the Coronavirus has changed the way we can do business. If you are a small business owner who is not struggling, then you are part of the minority.

Considering almost every business in the country is suffering in one way, shape, or form, there is no need to conceal your financial situation and you should engage in discussions with your creditors and other parties in interest as early as possible. Don’t put your head in the sand, find ways to be proactive because it will pay dividends in the future.

Most businesses, including your suppliers, have endured significant hardship and continue to suffer. As a result it is important to make sure that you, as a small business owner, can meet the demands of your customers, and should also assess your supply chain.

• Engage early
• Find problems and propose solutions
• Innovate
• Maintain the confidentiality of your materials
• Get help

Engage in discussions with interested parties (creditors, landlords, etc.) as soon as you feel comfortable doing so. Previewing that you may not be able to make a rent or mortgage payment, that you may have breached a loan covenant, or other condition of an agreement with the other party, will provide them comfort in moving forward. You can always give updates as to how your business is performing when you have a better idea of the future.

As previously discussed, you should revise your business plan, and in doing so, list the challenges you anticipate facing. After that, make lists of potential solutions so that you can methodically develop strategies to solve problems. Even if the first set of solutions don’t work out, having options to overcome challenges will help you through them.

Try to find ways to implement innovative, new approaches towards your business. Technology has made it easier to provide services for customers and foster relationships with them, even if social distancing measures are in place. Incorporate technology into the way you do business and can help you find new mechanisms and systems that will improve your operations, without having to risk losing business while you learn how to use it.

Start now by downloading our FREE ebook to learn more about where to start and what steps to take.