Look, it happens to the best entrepreneurs. Their businesses fail because of unforeseen circumstances such as a pandemic. Today, thousands of businesses are closing down. Millions of people are going to lose their jobs all over the world. Families will forever be affected. Dreams will be crushed. Those who dreamt of making it on their own may have to go back to employment because they couldn’t get their business to stay afloat.
Are you in the same boat? Is your physical therapy franchise business on the brink of closing down? Are you ready to throw in the towel and admit defeat? Stop right there. There are still some things you can do to stop your business from collapsing. Sales are bad, yes, but that doesn’t automatically mean you have to close everything down. There are still some things in the checklist that you can do.
You’ve tried so hard not to retrench employees. You want to keep them because they have been with you for years. Even cutting their hours isn’t an option because you know they’re still paying the mortgage, tuition, insurance, and other things. But here’s the thing: if you don’t cut down their hours, your business will not survive this crisis. That’s only going to get worse for them from there. So, talk to your employees. Figure out a way how you can cut on the cost of paying them. They can reduce their hours. You can take a shift.
How about shutting down a portion of the business that isn’t earning? Look at your inventory. You keep pushing some unsaleable products because these are going to be “big” in the future. Now is not the time for experimentation. You need to cut aspects of the business that aren’t selling.
You should also renegotiate the terms of the lease with your landlord. They’ll understand that this is a horrible time for business. If they cannot accommodate your requests (because they have bills to pay, too), ask if you can terminate the contract. You can either look for a cheaper building to rent or move the operations of your business to your garage.
Ensure a Positive Profit Margin
When was the last time you did some costing? How sure are you that your prices are still updated? How much are you receiving in net profit for every product that you sell? Is the money enough to tide over your business to the next phase of this crisis? Analyze your prices—what you’re paying for the supplies, how much time you’re spending on the production, and how much you’re selling these products for. How sure are you that these are the right prices? Are your customers willing to pay a couple of dollars more? That will make a huge difference in your cash flow.
List Your Payables
Who do you owe money to? Are you paying a business loan? The first priority for every business is to pay its employees’ salaries. If you are unable to do that, your employees will find another employer who can pay them. You should prioritize paying taxes on time, too. There’s no use delaying the inevitable. Besides, do you know how much the Internal Revenue Services (IRS) will make you pay if you don’t file the right taxes? Pay off your creditors or lenders, too, as well as your suppliers.
This process is important because it makes you realize how much money you still have to operate your business. Is it truly that dire? Or maybe, you still have some wiggle room to try to make the business work?
Make a Detailed Cash Flow Plan
Look at what you expect in the coming weeks in terms of your cash flow. How much do you think you’ll earn in the next couple of months? Is this money enough to cover your business’ expenses? If it is, then don’t shut down your business. You still have some fight in you. A couple of months’ worth of earnings is still enough to pay the landlord and your employees, as well as the suppliers and other creditors.
However, during these months, make sure you have a plan to boost your cash flow. Make sure not to go below what you expect to earn, too. Use affordable marketing strategies and ad campaigns to increase your sales.
Is it a good idea to boost your business’ capital with your own money? You’ve done that before when you started the business, right? Did you get a return on investment already? Or, are you going to take a risk once more? Assess where your company is before doing this. It’s not always advisable to use your own money to save your business but if that’s the only way to save it (and you see a bright future for it), then do it carefully.