Wondering how to approach cost-cutting and revenue shifting in your business during a time of crisis? Want to know which Canadian business stimulus options you should look into?
At the start of April 2020, Shabir Ladha, CPA, CA, FEA and partner at KBH Chartered Professional Accountants in Edmonton, Alberta shared financial strategies his team is currently working on with their small business customers as they navigate the realities of COVID-19.
Major discussion points
1:22 – What the KBH team is seeing their small business clients go through
2:50 – Top four things every business owner should do, starting with examining costs
4:00 – Understanding what government programs are available to you
4:45 – Securing revenue streams and creating new ones
8:02 – Brainstorming value added services you can offer
8:59 – Planning for the possibility of buying competitor client lists
12:05 – Canada’s change to tax deadlines
12:48 – Canada’s payroll subsidy programs
21:45 – Canada’s emergency business loan
27:57 – Reviewing your personal financial options
4 key takeaways for business owners
Here are four steps Shabir recommends every business take during this time, in order of importance:
1. Get a handle on your costs
“You should be monitoring them on an ongoing basis anyway, but now it’s really important to know where every dollar is going and what you’re paying for. When businesses were thriving, you could let that stuff go a little bit, but at this point in time, it’s really important to watch. On a personal note, we’re looking at our internal personal expenses: I spend a lot with TELUS between internet and telephone and TV. Do I really need all that stuff?”
2. Look at government programs
“Find a trusted resource, whether that’s your accountant or your banker, or use the government websites if you’ve got the time to dig through all that information. Figure out what might fit, and then dive into the details. Get a handle on what government programs are out there, and what you can take advantage of.”
We’ve compiled a list of government relief resources to help home service businesses in Canada, the U.S., the UK, and Australia navigate the financial effects of COVID-19.
You can also visit the KBH website to review their roundup of COVID-19 financial resources for Canadian business owners.
3. Examine your revenue streams
Collect your accounts receivables
“There’s uncertainty about collecting accounts receivable, so do what you can to start collecting that. Make sure that you are on top of your customers to get paid for the work that you’ve already done. That’s going to help your cashflow obviously and keep you afloat.”
Partner with another business
“You might not be able to generate any money out of it, but you might be able to help some others navigate one or two of those benefits, and that might just build a bridge for the future. Right? If you’re working in one industry, somebody else is working in a complimentary industry, reaching out and working together on something, when you both come out of this can mean you might be able to work together with sharing customers, sharing resources. So that’s not going to generate some revenue for you, but it could help long-term.”
Explore value-added services
“Think about some of the value added services you might be able to layer on. The toughest customer to get is the new one. The easiest customer to get is the one you already have, so if you can provide a little bit more to your current customer, that’s going to make it easier for you to grow and generate additional revenues.”
4. Look for opportunities
“This will end. Before social distancing completely ends, it’ll decline a little bit. We will decrease the amount of time we’re spending at home or working from home. Our world will get back to some semblance of normal. At that time, opportunities will open. There will be things you can do. So if you’ve got time now because you’re not as busy, can you plan and strategize looking at new markets, at different services, looking at pricing?
Some of your competitors aren’t going to make it out of this. It’s unfortunate, but it’s true. That’s just what’s going to happen. Their customers are going to be up for grabs. How can you be in a position to get those customers to come to you rather than one of your other competitors that did survive?”
Need help navigating other COVID-19 challenges?
Visit Jobber’s COVID-19 Home Services Resource Hub.Visit The Hub