Tips on Keeping Your Event Business Afloat

With the coronavirus bringing events to a halt, two CPAs share tips on keeping your business afloat till the storm passes. 

GET YOUR FINANCIAL HOUSE IN ORDER

Here are strategies from Trina Rosen, a CPA based in South Pasadena, Calif.

“Many small businesses are faced with unprecedented hardship. If any hard but important lessons are to be learned from this devastation is that cash and access to cash is the life of one’s business; therefore, planning for adequate cash reserves should be the No. 1 priority of all businesses.

Having a backup plan such as business line of credit, used for emergencies only, is also important. I like to refer my clients to Bank of the West for small-business loans.

During this downtime, business owners should evaluate their contracts and especially cancellation clauses, look into budgeting tools for the future, and establish working capital and cash reserves goals to be implemented after this disaster passes.

Many of my event clients operated on good will alone and now are having trouble collecting on the projects that have been completed. This should serve as a reminder to all that collecting on your jobs is just as important as delivering your services. QuickBooks Online, for example, offers a variety of app solutions for contracting and collecting. Some of my favorite apps are Practice Ignition for proposals and payments and ARCollect for automated collection.

After this crisis resolves, it may make sense to partner with an accountant who is well-versed in small business applications such as budgeting, financial goal setting, contracts, and collection tools to help educate yourself on a better way of running the financial side of your small business.

Slowing down accounts payable payments is a strategy to help stretch the cash. Letting your valuable vendors know that you are willing to work with them and work out a slow but steady payment plan may help not only with the cash reserves, but also with the preservation of vendor relationships.

Finally, California has enacted a work sharing program to help employers avoid layoffs. Employers experiencing a slowdown in their businesses or services as a result of the coronavirus impact on the economy may apply for the Unemployment Insurance Work Sharing Program. This program allows employers to seek an alternative to layoffs--retaining their trained employees by reducing their hours and wages that can be partially offset with unemployment benefits.”

GET THE EAR OF GOVERNMENT

Michael P. Kelly is a CPA based in Thousand Oaks, Calif.

“You want to help the small-business owner: Tell them to stand up and get mad. Pressure the government.

Millions of small-business owners will not survive. The government has ordered them to shut down, and they will not survive. If cash is not put into their hands this week, and if their scheduled debt is not extended, they will not survive and there will be civil disobedience. In fact, there should be civil disobedience. All the years of paying taxes, all the years of creating jobs, and the government just orders them to shut down. Without compensation. Yet these same officials pass money out to foreign countries, banks, big corporations, etc. Unacceptable.

Ninety-nine percent of the banks in the U.S.A. are FDIC-insured, thus they must do what the government directs. The President of the United States must issue an executive order immediately as follows:

All banks with ATM machines will allow every individual account holder to withdraw the maximum amount allowed every day for 30 days, and the amount withdrawn will be paid back to the banks by the U.S. Treasury Department.; all banks will identify their small-business account holders, defined as less than 50 employees, and immediately transfer an average one month’s gross revenue into that account--that amount will be paid back to the banks by the U.S. Treasury Department; all banks or bank services companies, holding debt of any kind will program their software to extend, without interest or penalty, every scheduled debt payment for 30 days.

These steps will alleviate the stress and pressure on small businesses and individuals. People can go home. People can quarantine and survive.

If you think they cannot do this, think again. They can and they must. In Desert Storm, the troops were given millions to pass out for information on the location of the Taliban. In the 2008 crisis the Feds gave the banks $4 trillion. There is precedent.”