Several states, California included, have shut down what they call “non-essential services” until they can get better control over the rising cases of COVID-19. Although construction is currently proceeding mostly as usual, this may not be the case next week. Dealing with a state-level or city-level shutdown presents a number of possible complications for your business. Here are five things you can do to help keep your business going, if you’re forced to cut hours or shut down for a short period of time.
Assess Status of Current Projects
It is common for contracting businesses to have several jobs going. You might be almost done with one and barely starting with another. The first thing you should do is assess where you are at with every current project. In some cases, you may be able to suspend work for a short period of time or change the nature of the project while you wait for a shutdown to end. In other cases, you might simply need to finish some paperwork, which could be easy to do remotely. There’s a high likelihood that you would have to suspend most work during a shutdown. But there may be other ways to run your business in the meantime.
Check on Your Cash Flow
One of the first rules of running a contracting business is to ensure that your cash flow is sufficient to handle temporary delays in revenue. While a shutdown due to COVID-19 might be longer than temporary, it’s possible that your cash flow may still be able to buy you some time. Invest the time to examine all of your expenses, including:
- Workspace rentals
If you made active orders for projects that are now on hold, you may be able to pause or cancel them until you are ready to make those orders again. Finding ways to limit what you have to pay can help ensure that you save most of your money for important things like keeping your employees on-staff.
Consider Financial Support
While the last thing that you may want to do right now is take out a loan when you’re not bringing money in, there are a variety of ways you can look at getting extra financial support while you wait for the opportunity to open business again. This might come in the form of
- Low-interest business loans
- Lines of credit
- Grant programs
Take a look at federal legislation related to economic stimulus and see how the benefits for businesses may relate to yours in particular. It’s an imperfect solution, but it may help you keep the lights on.
Communicate with Clients and Lenders
In any kind of crisis, most business owners try to plan for the worst but hope for the best. This involves making sure that everybody who relates to your cash flow, from clients to lenders, is aware of what you are dealing with and how you were working to minimize problems. It might mean trying to negotiate a new timeline with a client rather than having to abandon a project altogether. It might also include talking to lenders and creditors and requesting some kind of forbearance that allows you extra time to catch up on payments while your income is lower. In most cases, you are much more likely to reach a satisfactory agreement if you talk to them before you fall into violation of the contract.
Get Updates on Limitations
While some experts are estimating that the threat posed by COVID-19 may last for months or even years, it is unlikely to lead to a long-term shutdown of the construction industry. That said, it is hard to tell when barriers to normal business function will lift. You should plan to spend some time every day looking for news as it relates to your field. This will give you the best opportunity to find out when you’ll be able to start working again.
Running a business in the middle of chaos can lead to a shutdown. With these tips, you’ll know what to do to keep your company as safe as possible. For more information about preparing for your contractor licensing exam from home, contact CSLS today!