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This article has steps to proactively protect your business. Scroll to the bottom to find additional resources such as a PPP loan forgiveness calculator.

If you are a small business, you are being impacted by the COVID-19 and the shelter in place orders. Do not wait, now is the time to be proactive. You need to protect your cash. Running a business is like steering a barge down the river. If you wait too long, you may not be able to avoid a crash.

Step #1 – Consolidate as many liquid financial resources as possible. When sales slow down, it’s time to get your cash in order. There are a few options available:

  • Apply for and obtain SBA loans.
  • Evaluate open lines of credit.
  • Consolidate cash savings.
  • Consider home equity financing.

Step #2 – Prepare and update a crisis budget. Identify your critical costs. Consider contacting your bank for loan deferral options.

  • Fixed Costs – these expense do not change regardless of sales. This includes items like your office lease, utilities, and software subscriptions. Look hard at your fixed expenses over the past three months, are there line items that can be temporarily suspended?
  • Variable Costs – these expenses are incurred as part of your product or service delivery to your customers. Can you provide your service more price efficiently?
  • Payroll Costs – See the next step. Payroll costs are often times a businesses most valuable asset and most expensive line item. Do you need to make temporary changes?

Step #3 – Develop an employment strategy.

  • Make a list of vital and non-vital employees.
  • Consult an employment attorney regarding the requirements for time tracking, furloughs, layoffs, and voluntary unpaid leave.

Step #4 – Prepare and maintain a cash flow burn rate analysis. Create and maintain a spreadsheet, either weekly or monthly, with the following:

  • Beginning cash available
  • Anticipated inflows
  • Anticipated outflows
  • Ending cash available

Step #5 – Track loan forgiveness expenses. See our Loan Forgiveness post for more specifics and resources.

  • Identify qualified loan forgiveness expenses
  • Maintain a spreadsheet of SBA loan proceeds and qualified forgiveness expenses.

Step # 6 – Implement cloud-connected technologies and safeguards such as two-factor authentication.

  • Video conferencing
  • Internal communications
  • Cloud-based accounting

Protecting our business clients is our top priority. Please let us know how we can be a resource to you.

Helpful Articles & Links:

Loan Forgiveness Calculator & Program Specifics

PPP Loan Application Form

IRS States PPP Loans Are Taxable

Schedule C Independent Contractors – Loan Forgiveness

Minnesota Unemployment – Questions for the Self Employed

Minnesota Unemployment – Questions for Employers

CARES ACT New NOL Rules for 2018-2020