Top Five Mistakes Small Businesses Are Making During The Pandemic

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By addressing these challenges, finance chiefs will be stepping up as strategic partners to their CEOs.

These challenging times are a stress test for all companies. As the owner of a debt mitigation company, I have never seen such a wide variety of issues plaguing the fiscal health of small businesses. Some are open, while others are closed but trying to reopen; the remainder are waiting for the government to allow them to reopen. My company has helped almost 2,000 businesses and we have seen every issue a struggling business might face. Patterns emerge, and the top five mistakes we see small businesses making, again and again, are:

1. Failure to access Small Business Administration (SBA) programs.  Our nation’s small businesses are facing an unprecedented economic disruption due to the Covid-19 outbreak—yet the majority do not take full advantage of the programs the government is offering. In March 2020, President Trump signed into law the CARES Act, which contains emergency relief resources for American workers and small businesses. On June 15, the SBA resumed accepting new Economic Injury Disaster Loan (EIDL) applications from all eligible small businesses. Sifting through the SBA programs and diligently applying to the appropriate ones can be time-consuming but it is a worthy endeavor that few small business owners should ignore.

2. No dialogue with commercial landlord. Some small business owners would rather pretend their landlord doesn’t exist than pick up the phone and look to renegotiate terms. However, if significantly less revenue is being earned in the business, paying the rent on an active lease demands that small-business owners negotiate. With the record number of unemployment claims, loan defaults and bankruptcies, landlords are more open to lease negotiation because they need revenue, even if it is less, to pay their own mortgage bills. Finance chiefs may want to negotiate for better terms and rates, payment deferments, permission to sublet or subdivide a space, waive late fee, or consider lease buyouts.

3. Hiding from the Internal Revenue Service. As “nothing is certain but death and taxes,” there is just no use hiding from the IRS. Small businesses with tax debts face the intimidating IRS and the various methods that the agency can use to collect overdue taxes — many of which could spell the end of one’s company. However, communication is key as most small businesses that are behind in taxes typically can work something out with the IRS; it is possible, for example, for a small business to make a deal with the IRS to settle a tax bill for pennies on the dollar through the offer in compromise process. Requesting an offer in compromise requires the business to complete an IRS form; provide detailed information about its difficult financial situation; and request that the IRS take only a portion of what the business owes.

4. Failure to consolidate debt at lower interest rate. With businesses, particularly during the pandemic, cash flow isn’t always a constant. Sometimes you need to pay for unexpected expenses, make payroll or fund new equipment. If you don’t have the cash on hand to afford those things, you might be accessing a business loan or credit cards. Keeping track of different due dates, interest rates and balances can be onerous and some CFOs can successfully consolidate debt at a lower interest rate.

5. Failure to tap into digital tools to optimize productivity for home workers. With social distancing precautions, many companies require that their employees work from home until further notice. This allows many companies to continue business as usual — but they need to have the right tools in place to make remote work a success. Working from home is very different than working in an office, so what works when everyone is in the same space might not translate when everyone is in their respective homes. It’s important to do a comprehensive review and analysis to use the optimal digital tools that work for each individual business. According to a survey from, 80% of small business owners accepted that Covid-19 has hurt their businesses. However, 55% feel optimistic about the future. There is no reasons for businesses to stop innovating during the pandemic. Particularly for small businesses, who sometimes lag behind in technology innovations, and especially now, it is critical to reach customers through digital channels.

As CFO, you can help steer the ship to calmer waters.

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