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COVID-19 Cash Flow Triage

The majority of small businesses have taken a huge hit as a result of the COVID-19 pandemic and as of this writing the future remains very uncertain. What is a small business owner to do? For humans, uncertainty equates to fear, and fear can stop us in the middle of the road and leave us quite vulnerable to additional injury. If you find you are simply unable to move I want each of you to know that I can help. I am a kind, patient and knowledgeable guide and I would be happy to help you as you take your first steps towards recovery. You don’t have to do this alone.  Help is available anytime you need it. Just ask.    

I find entrepreneurs to be resilient, adaptive and willing to embrace the unknown.  That’s how we got here in the first place isn’t it? Now is the time for you to shine and get back to doing what you know how to do so well. I know it may feel scary but do it anyway. Some businesses have been hurt more than others, but everyone is going to need to implement some working strategies to begin their recovery and a plan will go a long way to secure your success.

So, what can you do?

First – Do a little cash flow triage. What that means is to first look at the damage. What money do you have on hand? What money can you count on to come in? Write it down.

Second – Look at your most immediate, most urgent needs. Your personal needs are going to be things like groceries, rent or mortgage, utilities, gas for the car, financial help for an adult child or an aging parent and the like. Then, look at the overhead for your business (grab your Profit & Loss report – if you don’t have one, we REALLY need to talk). What expenses do you have that cannot ignored? What payments did you defer? Make a list. Your phone will be on that list for sure. What else? I don’t encourage stopping your marketing but if you need to then do so but this would be something you want to back into your recovery plan ASAP! 

Third – Once you have made the lists of your most urgent financial needs, both personal and business, your deferred obligations and upcoming expenses, then you can begin looking at what you’re going to do with the money that you have and what you might have coming in over the next few weeks. Write it down in weekly columns. For those of you where there really is no money to budget with you are going to have to cover your food and shelter and look to deferring more and towards accessing some of those very-hard-to-obtain resources out there before you can begin this work but you need to DO something.  Standing in the middle of the road is NOT going to work.  For those of you with some funds, this is a budgeting exercise.

COVID-19 Cash Flow Triage 1

You’re going to create a 6-week projection plan to help you know how to best use what you have on hand and what money you have coming in to manage your financial needs.  I am providing you the income calculator here for you to use. Instead of annual business and personal financial floors, use the totals from your lists and divide by 6 to get your weekly revenue targets for the next 6 weeks.  This will give you the information to make your projections for your cash flow triage. You can continue to defer some items, but you will eventually start working on a plan to get them paid.  Do this exercise again in about 3-4 weeks and add additional weekly columns.  You will continue to do this for the next few months until things begin to stabilize. 

If you missed my online Financial Planning workshop, be sure to like my Facebook business page so you can be among the first to know when it is offered again. I believe that nearly everyone is going need some help with getting yourself back on your feet and this workshop will be a great help.  Remember private consults are always available as well – just contact me.

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Lorna Whiteaker

Lorna Whiteaker is a San Luis Obispo business consultant and coach dedicated to helping business owners get the results they want. Lorna has over 30 years of experience working with small businesses, working as an administrator in the legal industry and as an independent business consultant helping hundreds of entrepreneurs. With clear and realistic expectations of just what a business owner must deal with in running their business, big or small, she has worked with firms making 7 figures and start-ups with little more than elbow grease and a dream.

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