By: Fabio Campanella CPA, CA, CFP, CIM
It’s no secret, this pandemic is affecting more than our health.
According to Goldman Sachs, small businesses in the US are feeling the impact of the measures taken to halt the spread of COVID-19. We can only assume that Canadian small businesses are experiencing similar symptoms.
So what’s a small business owner to do? Here’s our short-list of tips:
1: Don’t panic:
It seems obvious, but it’s not that easy. Panicking won’t lead to anything good; it will just lead to you spinning your wheels and achieving nothing. Concentrate instead on the tasks at hand. Is there work in progress you can complete? Are there deadlines that have not yet officially changed? Likely the answer is yes, so concentrate on those tasks first, get them out the door, ensure the quality of your services or products still meet your high standards, maintain your good reputation.
2: Cut unnecessary costs:
This doesn’t seem like a short-term dip in the economy, this will likely lead to a prolonged downturn. Assess your businesses costs. Do you have any unnecessary, non-revenue-producing subscriptions or recurring expenses? Small things add up. Now is not the time to be blindly allowing unnecessary software subscriptions to hit your business’ credit card on a monthly basis. Scrub your bank accounts and credit cards and eliminate anything that isn’t mission critical.
3: Get your personal finances in-line:
You may find yourself in a position of reduced or eliminated personal revenue for a period of time. If this is the case then you need to get your personal finances in line. Follow step 2 above for your personal life as well. Call your bank and ask them what your options are for deferred payments on your mortgage or other loans. Once again, don’t panic, take a systematic approach to your personal finances in the same manner you tackle your business’ finances.
4: Get ready for a bounce-back:
Trust me, this sucks, but it won’t last forever. All indicators point to a recession, a prolonged one at that. However, this isn’t the first recession we’ve been through and it won’t be the last. The economy is resilient, humans are creative. We will bounce back from this in time. There is a ton of uncertainty right now. We don’t know how long the interruption to our normal lives will last. We don’t know what the social and economic impact will be. But we can look to history and cite many examples of disasters, both natural and human-made, that we pulled ourselves out of.
5: Ensure you and your employees know what government assistance is available:
The government of Canada, like many others, is in the process of rolling out a massive economic response plan to assist Canadians affected by this pandemic. The measures proposed include assistance to both Citizens and businesses in the form of direct payment, leniency on taxation matters, along with other assistance. For details on Canada’s plan CLICK HERE.
Fabio Campanella CPA, CA, CFP, CIM is a founding partner of Campanella McDonald LLP. He is a tax specialist, an investment advisor, and an estate and life insurance advisor licensed in the Province of Ontario. His practice focuses on building tax-efficient retirement and estate plans for entrepreneurs, retirees, and high-income earning professionals. You can access his website by clicking HERE.