As small business owners look to operations after COVID-19, there are some important business questions to ask. These questions will help you determine what adaptations you want to keep, whether your business model is working, and if there are additional changes you want to make to keep your company operational through future economic downturns.

It’s not always fun to do this sort of examination, but the answers to these questions will help you to make the best possible decisions for the future.

1. What worked and what didn’t work in my business model?

We’ve heard this before: the COVID-19 pandemic is an unprecedented global health and financial crisis that has caught many off guard. While the threats to human life are very real, the damage to the health of businesses is really just starting to show.

The seriousness of the disease and the lack of a vaccine (at the time of writing this) have prompted governments around the world to impose strict measures to contain the virus. These restrictions in people’s movements and the temporary shutting down of non-essential services have definitely taken a toll on businesses.

I’m not going to make a long drawn out statement here. The events of the past few weeks disgust and shock me. But they do not surprise me. The murder of George Floyd was the spark that ignited the powder keg. Until the rest of us can acknowledge that there is in fact systemic racism in our cultures we can never properly deal with it. The great American, Canadian or Kiwi dream of success and prosperity can never truly be achieved when a segment of our population are directly or indirectly sidelined, ignored or abused. It has to change if we value the culture of our society.

If you’re like many small business owners you’re probably astounded by how the world has changed in a very short time. While we can all hope that the pandemic is a once-in-a-lifetime scenario, the truth is there is a lot in life and in business that is uncertain, and there is a great deal we can learn from the response to COVID-19 to help plan for the future.

Yes, your business might have changed drastically in recent months. There is good news in that, too. It means your business is adaptable and that you can find ways to survive.

Your ideal structure will allow your business to become more efficient and achieve economies of scale. This increases your bottom line returns at a greater rate than your revenue. Your organization structure should allow your revenue to increase without creating bottlenecks.

An organization structure should show all ten departments in your business, who is responsible for what, and how the hierarchy works.

Managing cash flow is a vital part of running a successful business. Some business owners think managing cash flow simply means keeping track of how much money enters and leaves their business, but there’s actually more that goes into it.

Cash flow forecasting, for example, is an incredibly valuable tool that helps you anticipate cash flow issues, plan for days when your cash flow is limited, and show the bank that you are prepared.

It’s an important process that you shouldn’t ignore. Here are some ways cash flow forecasts help entrepreneurs. They help identify cash flow issues before they happen

Since the first internal corporate note was sent—probably reminding employees about casual Friday—companies and organizations have relied on written communications to keep employees up-to-date on company policies, procedures and changes happening within. These days, though, more companies are switching to videos to relay information to their staff.

In a lot of ways, video is more effective than written communications. It grabs peoples’ attention, conveys important information quickly and is usually memorable. It’s also practical.

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

Sylvia Ho, from Sylvia Ho Mortgages, explains how to Recession-Proof your Mortgage. She offered a free Mortgage Rate Monitor service to see how you may be able to take advantage of the fast-moving mortgage situation, or even just to get a second look at your current mortgage. You can contact Sylvia at mortgages@sylviaho.ca or phone 647-223-6100.

At a recent Hangout we had Ashkan Refghi & Geraint Court from CIBC Business Banking talking about Business Finance. You can reach Ashkan at (905) 505-2739 or ashkan.refghi@cibc.com .

As many business owners look to life after COVID-19, an important question comes up: how do we plan to reopen our business? For most businesses, the easing of restrictions doesn’t mean a return to business as usual. There are rules and regulations in place about how companies can operate, including how many people can be on their premises at one time and how employees must be protected. Customers may not come back quickly and supply chains may still be disrupted.

Your main goal is to keep your business going after COVID-19, but reopening requires careful planning.

When you own a small business, it’s vital you understand how money flows into and out of it. At a basic level, you need to know where your income comes from and what your expenses are. At a deeper level, knowing how money moves through your business can help you make strategic decisions about growth, invoicing, and debt management. The consequences of not understanding money can be drastic—poor financial management is one of the main reasons businesses fail.

You know what you want from your business; now it’s time to plan how to get it.

Start by deciding what you want personally from your business. For example, if you need $100,000 p.a. to cover your living costs and a family holiday, and your overheads are $100,000, your gross profit needs to be $200,000. If your current gross profit margin is 50%, then your annual sales need to be $400,000.

Make sure your plan is linked directly to how you’ll achieve what you want personally from the business, e.g. $100,000 and a six-week holiday.

At our hang-out this week we discussed How to Survive a Recession.  Outline below.

How to Survive a Recession

• The New Normal
  • We won’t return to “normal” for at least a year
  • Re-opening our economy will be a phased and slow process
  • Social Distancing will be the norm – now an employee health and safety issue and opens up huge legal issues if the public contract COVID-19 from your business
  • Large Gatherings will be banned for most of 2020

Even the best entrepreneurs make mistakes. In fact most would advocate that you need to make a few mistakes to learn and grow. So it’s important not to let those missteps stop you from following your dream of running your own business.

There are some common mistakes business owners make in running their company. Don’t feel bad if you fall into these traps—almost every small business owner does. Here’s our top three mistakes and how to avoid them.

At a recent hang-out I interviewed Andrew Frank, founder of Lingo Luxe Bespoke on what he’s been doing while his business is on lock-down and he can’t do the things that he normally would do.

Your “war chest” is the financial reserve your business has built up so you can take advantage of an opportunity or cover unexpected costs or emergencies. Building a cash reserve when finances are tight, however, can be difficult. You need money to continue running your business but, if at all possible, you want to keep your reserve account healthy.

Here are some ways to build—or preserve—a cash war chest during a crisis.

1. Shift all extra money to your cash reserve

Accounting software has become a necessity for today’s accountant. After all, the tool automates and simplifies several mundane and complicated tasks. In fact, accounting software is more essential for small business owners who can’t afford to hire an accountant. Today’s accounting tools are so simple that they can be operated by a person with little to no accounting knowledge. However, it is important to invest in the right accounting software in this ever-changing digital world. For example, you can switch to a cloud-based accounting tool if you are looking for more flexibility and ease of access. In cloud technology, users access software applications remotely through the Internet.

Cloud computing accounting software, broadly speaking, is an online tool. You need the Internet connection and login credentials to access the tool. Technically speaking, the cloud accounting tool is hosted on remote servers. It means that all functions are performed off-site, not on your desktop. Since the software is provided over the Internet, you don’t need to install or maintain on your desktop computers. All you need to visit the page of the accounting software and feed your credentials to get started.

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

The Canadian Federal government has announced a temporary wage subsidy to help employers keep payroll alive the COVID-19 crisis.  Please note that there are 2 subsidies – the Temporary Wage Subsidy (10% – documented below) and the Emergency Wage Subsidy (75% – documented in this post).

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

The Canadian Federal government has announced some temporary extensions to tax filing and payment deadlines to ease stress and cash flow during the COVID-19 crisis.  Updated with new deadlines on July 29.

* = Updated

IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.

The New Zealand government has announced a wage subsidy for employers who continue to employ staff during to the COVID-19 lockdown and while reopening the economy.
Here’s what’s new since the video was recorded:

(8 June) In the budget the government announced an extension to the Wage Subsidy. From June 10, business that have suffered a 40% reduction in turnover any 30 day period between 10 May and the date of application as compared to 2019, will be entitled to the wage subsidy for a further eight-week period. High growth and new firms will also be eligible.  Here’s what you need to know: