With less customers, dwindling sales, and possible job cuts, your SMB is feeling the effects of COVID-19. A study by the Canadian Federation of Independent Business (CFIB) suggests that 25% of small and medium-sized businesses won’t survive longer than a month due to COVID-19 if they continue to lose revenue.
The economic impact of a health crisis like the one we’re seeing
with the coronavirus is unavoidable for most SMBs. But it’s important
to respond correctly. Find out how to adapt your operations to
minimize the damage.
While consequences seem inevitable, you can still prepare to face this crisis and even get through it. Before undertaking any concrete action, it’s important to take the time to analyze the situation, understand the challenges, then find any possible alternative solutions.
Figure out the challenges specific to your business, because the situation is different from one sector to another. Take a look at what you’re up against. Determine which sources of supply are being disrupted or blocked altogether. It may also be difficult to reach your usual sales objectives, therefore you may not have enough cash to pay for your fixed expenses, like rent, loan repayments, taxes, payment for your suppliers, or even your employees’ salaries.
Once you have an idea of your overall situation, start thinking about how your business will have to operate for the time being.
As Martin Cinq-Mars, Senior Advisor, Commercial Banking Sales Effectiveness at National Bank, explains, “To free up cash in the short term, you’ll have to work on your long-term liabilities.”
If you still haven’t set up a contingency plan, it isn’t too late. You can still set up some survival strategies to ensure your operations continue. Here are some guiding principles you can follow:
Maintain your business’s essential activities at the very least
Adjust your plan so it lines up with the new challenges you’re facing
Manage your employees’ expectations and needs
Change your usual operations process
Generate cash and reduce risk
“Get support from your specialists before making a decision,” explains Charif Madih, Chief Advisor for Commercial and International Solutions, at National Bank.
Whether you go to the Bank, to your financial advisor, to your accountant, or even to a legal practitioner, speaking with an expert is always a good idea before making a decision.
For example, if you contact your account manager, they could inform you of government relief programs that your business is eligible for and pick out the best options among the various programs.
To minimize the economic impact, the government at both the provincial and federal levels are setting up financial support and recovery measures.
In Quebec, the government plans on putting off the deadline for submitting tax returns. But there are other sources for assistance and information.
If you’re an exporter, Export Development Canada (EDC) has said they’re ready to help Canadian exporters during the crisis, particularly by expanding access to credit for Canadian exporters.
As for the CFIB, they’re providing advice and support to independent business owners.
Take a look at Info Entrepreneurs, too, to get information and assistance from your local development centre.
Other sources of support and information like Investissement Québec are maintaining minimal operations and remain available despite the circumstances. But because the situation is changing rapidly, it’s important to stay informed every day. You can read about new measures established by the government by checking out the Department of Finance Canada’s website, which outlines the economic intervention plans in response to COVID-19, or the Ministère de l’Économie et de l’Innovation’s website, which provides the number for a coronavirus information hotline.
The Bank is adapting and reacting to the situation. We’re aware of the challenges you’re facing and doing everything we can to help and support you as best as possible.
If you’re a business owner or administrator, contact your National Bank account manager. Each business segment has their own particularities, and the same goes for the solutions we can propose.
Even in these trying times, the Bank is here to help and is committed to keeping its promise of meeting your needs.
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