Even before COVID-19 hit, many business owners stayed up at night worrying about money. With “business as usual” a distant memory, many owners now face bigger questions about staying in business.

These five steps can help you address some of the most immediate concerns — and keep your head above water — while you work on more permanent solutions as the new reality becomes clearer.


  1. Make a list of your expenses and revenue

Or ask your accountant to share this list with you. Look over your balance sheet (assets and liabilities) and your income statement (cash flow).

This may seem overly simple, but many owners aren’t tuned in to monthly accounting details or various payment terms. If you have to prioritize or renegotiate your finances, it can help to see all of the moving pieces.

If you need a refresher on bookkeeping terms and technical details, you can read up on the basics.


  1. Develop multiple possible scenarios

Whether your business has closed or remained open during the crisis, the outlook for most industries remains unclear. To help plan, consider a number of scenarios and analyze what your finances would look like in each.

For instance, if you’re planning to reopen soon, envision the rest of your 2020 if business starts up at 50 percent of pre-crisis levels. What about 15 percent? Or imagine you’ll see a jump in activity due to pent-up demand. Can you ramp up quickly enough to meet it?

What does cash flow look like in each scenario and how do you build inventory and staffing to meet your needs? If you’ve had to adjust inventory and staffing due to a previous closure, how long will it take you to readjust to meet new demands?

Read more on rethinking your operating model.


  1. Call your partners — customers, suppliers and bankers

Managing expenses is going to be key. The good news is, nearly everyone is aware of the challenges facing business owners and will work with you. Be transparent about your ability to pay your vendors and make payments on any outstanding loans. The scenarios you developed in step two can help you speak realistically with creditors about when you’ll be able to pay them.

You can also negotiate with customers. In addition to any discussions you’ve had about keeping their business, don’t be shy about discussing payment terms. You could ask them about paying in advance for previously scheduled orders in exchange for a discount, for example. Creative solutions may be able to help you improve cash flow.


  1. Apply for help

The government-backed Paycheck Protection Program (PPP) is the most popular small business relief effort, but it isn’t the only option. If you did not receive funds, the CARES Act allocated additional resources to help business owners.

If you did qualify for PPP, it’s important to be aware of how the program is changing. For instance, the PPP Flexibility Act passed June 5 updated the terms and extended the covered period.

If you bank with Wells Fargo, our Paycheck Protection Program page can help answer questions. Or visit our COVID-19 resources and support page to see which resources you might qualify for.

Ultimately, you want to ensure that any aid you apply for makes long-term sense for your business. As the outlook for the economy and your business begins to stabilize, you might also consider whether more traditional financing options, including loans or lines of credit, might make sense.


  1. Look for new revenue streams

It’s a good idea to think about different sources of revenue throughout this crisis. COVID-19 — the virus itself and our response to it — has changed Americans’ outlook and how we do business. It remains to be seen how many of those changes might be permanent, but it’s worth testing your business against different scenarios.

For instance, if Americans eschew restaurants or live entertainment in favor of cooking at home and digital entertainment, what does that mean for your business? Let’s say you print T-shirts for musicians to sell at concerts; you might need to consider different distribution ideas or using your facilities to make a wider variety of merchandise.

Read more about consumer reactions to COVID-19 and what that means for your business.

While there’s no easy solution to ease financial worries during a crisis, there are steps you can take to feel more in control. Focusing on facts, building varied forecasts, and communicating openly can help you secure funding and better prepare for the future.


SOURCES: DaySmart Software, Small Business Administration, National Law Review