The pandemic has wreaked financial havoc on businesses around the world. However, small businesses have without a doubt been hit the hardest. The National Federation of Independent Businesses reported that 92% of small businesses said they struggled with negative pandemic-related financial hardships. While the outlook for small businesses post-pandemic will vary by industry, small business owners need a strategy for rebuilding and getting back on their feet.
If you are a small business owner that is struggling to make ends meet as a result of the pandemic, seek advice from a business debt settlement attorney. Here are some helpful tips for reopening your business and managing debt after COVID-19.
Assess the Financial Damage to Your Business
The first step in developing a strategy for rebuilding your business after COVID-19 is to assess the financial damage. There are different elements to this assessment—the most obvious being crunching the numbers and calculating your profit and loss or cash flow statements from 2020. You can then compare these numbers to those of 2019 to see how much your business is down.
In addition to the hard numbers, there are other ways your business could have been financially impacted that are important to consider. For example, if the pandemic caused you to lay off some of your staff or reduce your marketing spend, you’ll need to account for these factors in your financial assessment.
Re-Evaluate Your Business Model
Your business model may have worked great pre-COVID, but business will look very different post-pandemic. Therefore, it’s important to adjust your business model accordingly. You’ll need to consider how you can pivot to fit the new normal. Since the pandemic caused the world to go digital in a big way and streamlined a lot of business processes for the consumer, it’s important to offer your customers a way to interact with your business online. If you previously relied solely on foot traffic or a brick-and-mortar location for sales, this will be especially important to rebuilding your business.
Analyze how the industry your business is a part of has been affected by the pandemic. Be sure to pay attention to current trends and identify gaps within your market where there could be an opportunity. Finding and capitalizing on a gap in your market is a way that your business can fulfill a consumer need that, until now, has been neglected. This could be a beneficial strategy to reclaim and even expand your customer base.
Will You Need Funding to Recover?
Unless you had an emergency fund or a significant amount of cash set aside before the pandemic, it’s likely you may need some capital to hit the ground running post-pandemic. Luckily, there are several options available for financing your business during the rebuilding period.
The Paycheck Protection Program provides small businesses struggling to retain their employees during the pandemic with the funding to do so. It’s a great resource for small business owners. Additionally, there are Economic Injury Disaster loans that can provide short-term financing for things other than employee retention. The one issue with both of these federally funded relief programs is that the funding is limited. For this reason, small business owners should consider other resources for funding, including:
- Small business loans from banks, credit unions, and other lenders
- Business lines of credit
- Merchant cash advances
- Inventory, purchase order, and equipment financing
All of these options have pros and cons, and it’s essential to assess your situation and choose the financing option that is best for you. A great way to choose the right financing option is to consult a debt settlement lawyer with your best interests in mind.
Contact a Skilled Debt Settlement Lawyer
If your business has accumulated significant debt because of the pandemic, you are not alone. Only 5% of small businesses have reported the pandemic had no effect on their bottom line. Consulting with a skilled debt settlement lawyer is a great way to explore the options for tackling your debt and getting your business back on its feet.
At McCarthy Law, we are dedicated to helping our clients navigate their financial circumstances and reach a favorable debt settlement. We understand the overwhelming burden that debt can have on people’s lives and are committed to helping clients end the cycle of debt. To schedule a consultation with one of our skilled debt settlement lawyers, call our office at (855) 976-5777 or fill out our online contact form.