How Small Business Owners Can Protect Their Financial Future During the Pandemic

COVID-19 brought drastic changes to everyday life and business operations alike. As a small business owner, you likely have been significantly impacted by the pandemic, even if your industry was not necessarily one of the hardest hit by the global health crisis. While the pandemic is not going to last forever, it has certainly changed the future of many industries, which is why it is important to find ways to continue to protect your financial future during these unprecedented times.


Manage cash flow effectively

One of the biggest issues small business owners face is managing their cash flow effectively, but doing this during a pandemic makes this task even more challenging. Having access to cash in a COVID-19 landscape is especially important for small business owners. This can be difficult when regular overhead costs such as payroll and rent can eat up the majority of cash flow.

Add to that the increased amount of restrictions on businesses combined with a potential decrease in customers and you may be facing the biggest hurdle in your entrepreneurial journey. While the pandemic is temporary, there is an immediate short-term need for relief to stay afloat so it’s important to get creative and find ways to manage the business’ cash flow.


Cut expenses

First and foremost, finding ways to cut unnecessary expenses from your budget can buy some time while giving you more access to resources that you may need. Depending on your industry, you may be familiar with seasonality changes that can affect your cash flow during a normal year. Because you were prepared for these highs and lows, projecting outwards and learning to reserve cash for certain times was part of your regular business process. However, the COVID-19 pandemic came without warning, meaning you had very little time to prepare.

While you may have been caught off guard, there are certain changes that the pandemic has brought that can help you find areas to cut some expenses you may regularly have in a given year. For example, while trade shows might have been a great way to market yourself in a pre-pandemic world, they are currently being put on hold due to social distancing measures. There are costs associated with trade shows, so eliminating this expense can help to keep money in the business. Additionally, if you traveled for work meetings previously, you might be able to recoup some of those expenses by setting up Zoom meetings instead.

Stay up to date on current relief policies

One of the best ways to have additional cash flowing into the business is by finding relief programs to help keep the business solvent. Because there are different options being offered and policies are constantly changing, it is important to keep up to date on current information surrounding relief programs.

While there have always been traditional programs through the U.S. Small Business Association, the Coronavirus Aid, Relief, and Economic Security (CARES) Act has created additional temporary programs to reduce economic hardship for business owners due to COVID-19. There are different programs available such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), SBA Express Bridge Loan, and SBA Debt Relief, so it is helpful to research which option would work best for you and take advantage of these opportunities sooner rather than later.

Renegotiate contracts

If you find that your cash flow is slower during the current times, remember that you are not alone. Take some time to discuss your payment options with suppliers to see if it would be possible to extend terms or receive a partial discount so that you are able to reserve some additional cash for overhead expenses. You most likely had a relationship with your supplier before COVID-19, so they are going to want to find ways to work with you to continue your relationship once the pandemic starts to subside.

Additionally, it can be helpful to look into renegotiating your contract with your landlord, especially if you are not physically able to work in the space you are renting. If you have moved to a fully remote location, you might not need to be paying for an office space or you can downsize, which would also help to reduce costs.

Consider financing options

While it can be challenging to borrow money during the COVID-19 pandemic, remember that it is not impossible. As a small business owner, you might face increased difficulty with getting approved for a loan and longer processing times. It might be beneficial to find different lenders or loan options to help you easily access cash for your business. For example, looking into a business line of credit can prove to be helpful because you are able to access funds to cover various costs such as payroll, rent, inventory management or growth opportunities. This type of loan is usually easier to qualify and you can obtain the funds and approval more quickly than a traditional loan through your bank.

Make sure you have the right benefits in place

As a small business owner, you are aware of the fact that one of the disadvantages to leaving the traditional workforce is losing access to employer-provided benefits. The autonomy and flexibility that comes with being a small business owner means that it is up to you to secure various benefits such as different types of insurances and retirement accounts. Now more than ever, it is important to make sure that you have adequate coverage to provide much needed protection during the current health crisis.

Health Insurance

When running your own business, it is essential that you remain in optimal health. Because this is unfortunately not always possible, it is important to have some type of health insurance coverage to make sure you can receive the appropriate care and attention that you need to get you back on track as soon as possible. Take some time to review your current coverage to make sure that if you were to get sick or injured, it would not result in major financial loss. Even though health insurance can be expensive, it is a necessary cost to protect your health, finances and the business’ future, especially considering all of the unknowns associated with the virus.


Life Insurance

Another type of coverage that is essential to have as an entrepreneur is life insurance. You might have been offered an employer-sponsored life insurance plan in the past but in most cases, this policy is nontransferable once you leave the organization. Maybe you already have a private policy in place but if you do not, now is a good time to start considering different life insurance coverage options. It is especially important to have some kind of coverage if your family depends on your income or if you used family assets to fund parts of your business.


As a small business owner, you are one of the most important components to ensuring the long-term success of your business. This is why it is important to view certain insurances and protections as business expenses rather than personal expenses, because keeping yourself protected is essential for the future of your business. Disability insurance might have been offered to you in the past from an employer, but similarly to life insurance, it can’t be taken with you when you leave the company. Disability coverage would protect your income if you were injured or too sick to work for both a short period of time or an extended amount of time. You could also use funds from this type of coverage to help keep the business afloat in an uncertain circumstance.

Adapt to your customers’ new needs and priorities

The COVID-19 pandemic changed most aspects of everyday life for individuals and businesses alike. While you have most likely been impacted as a small business owner, remember that your customers have also been affected. This is why it is important to also be mindful of how the needs, wants and spending habits of your particular customer base has changed. Finding ways to connect with your customers will give you an edge over any competitors while also potentially attracting new business opportunities.

It’s important to connect with your customers by understanding and adapting to their new habits and daily routines. This can not only help you survive during these tough times, but might even be able to project your business forward once things start to settle. Depending on your industry, the customer experience can be the main component keeping your business afloat. For example, if you are a restaurant owner, you might have been able to use social distancing measures and contactless takeout/delivery options to maintain your customer base. It can be helpful to continue to be innovative and find ways to build upon that coming into the holidays and the colder months. This will not only maintain customer loyalty and trust but attract new potential customer relationships.

Check in on your employees often

Your employees can be the backbone of your business, so it is important to make sure that you are checking in on them and making sure that their needs are being met. For example, if you have an employee who is around elderly or immunocompromised family members frequently, you could consider giving them the option to work remotely if their job can still be performed effectively from home. Making sure that your employees feel supported and cared for during these unprecedented times will maintain their trust in the long-run. That way, when things start to settle down, you will be in a position to advance leaps and bounds with your loyal employees.

As a small business owner, it is important to remember that the pandemic is not going to last forever. However, that does not take away from the fact that there are immense challenges you are probably facing in the meantime. Remember that it is still possible to thrive in times of adversity, which is why finding ways to get creative with managing your finances in the present can set you up for long-term success within your business in the future.



The information in this article is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial, legal or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.

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