By now, we are all aware of the importance of mask-wearing and social distancing, but there is more to know and more to do about protecting your small business.
At the top of the list is making sure you know the applicability and regulations regarding the Pay Check Protection Act. The Act provides financial resources to assist your small business in weathering the continued economic pressures caused by the pandemic and other associated issues. Maintaining your staff and paying your rent are significant concerns for any business. COVID-19 exponentially increases those concerns.
Beyond making your application, you must also take care to use the funds as intended by the Act so that you can obtain loan forgiveness. Here is where it can get tricky. Your bank will take your application but will not likely assist you in filling it out. There are pitfalls throughout the process and penalties for obtaining loans to which the borrower is not entitled. Moreover, failure to use the funds per the Act will mandate the funds received be returned. The application requires you to certify as to the accuracy of the information you supply. You should certainly reach out to your accounting and legal professionals to ensure you don't run afoul of the regulations.
You should also be proactive with your clients and customers. Reaching out to them and discussing how the pandemic is affecting their business and cash flow is essential to developing an understanding of their needs, your ability to meet those needs, and their ability to pay for those services or goods. Failing to appreciate your clients’ and customers’ financial condition may cause you to expend your resources unnecessarily and focus on the wrong aspects of your business. Now more than ever, it is vital to keep on top of your billing and receivables.
We have become familiar with online video conferencing during the pandemic, but many of us have not moved beyond the platforms’ basics. Being able to conduct remote operations is essential. You must learn how to use these platforms to their full potential and protect the information you share. Hacking has become a larger problem with the shift to remote operations, and having the right insurance, I.T. safeguards in place are indispensable. Having your attorney available to ensure you comply with your obligations if your customer information is hacked is vital to protecting your business.
Finally, while juggling staffing, physical safeguards, and temperature checks have become commonplace, we have entered the vaccine era. It is crucial to understand whether you can require employee vaccination and the consequences of doing so. You need to understand what information you can request from your employees and how to use it to protect your workforce.
There are no simple answers to these issues. Most require a thorough understanding of your business and your unique situation. Relying on your accountants, I.T. professionals, and your attorney are important steps in successfully making sure your small business weathers the pandemic. CLPHK can help.