Question: In a recent article you said “Your SCORE business counselor can assist you to establish a contingency plan that will enable you to deal with situations like the Coronavirus.” Can you please elaborate?

Answer: Whether it’s a pandemic like the Coronavirus, a fire or flood or some other happening beyond your control, their effects on small businesses are much the same. Either you are unable to provide goods and services to your customers or your customers are unable to access you.

Quite honestly, there is little one can do in these situations until the threat has passed.  If, however, you have developed a contingency plan, you have a cushion that hopefully will allow you to cope with the problem until things return to normal.

In the case of a fire or some other peril covered by insurance you could be back in business in reasonable period of time. It is important to be sure your insurance includes replacement cost coverage and business interruptions that reimburses you for loss of income and extra expenses incurred to return to business as soon as possible.

Insurance will probably not cover everything so it is advisable for you to accumulate a cash reserve to handle the salaries of key people you don’t want to lose, and other continuing expenses. Consider accident, sickness and disability income insurance for yourself and other essential employees.

Key to developing your cash reserve is keeping a close watch on your account’s receivables, if yours is a business that extends credit. Cash is king and money owed to you cannot be spent until it is received. Wherever possible try to collect at point of sale. In the alternative, try to limit your outstanding receivable to not more than 30 days.

If your building is damaged consider a reciprocal agreement with a friendly competitor or supplier to operate out of their premises until yours is repaired or replaced.

Much like seasonal businesses, you can use your down time wisely. Revisit your business and marketing plan to determine what is working and what may need fixing. This is an opportunity for reflection and refinement, something that usually takes a back seat in the normal hustle and bustle of running a business. Consider the following:

If you sell a product, do not overstock. Take a hard look at your inventory to determine the shelf life of various items. Stay adequately stocked with items that are in high demand and limit low demand merchandise.

Reach out to your customers to determine if you are meeting their individual needs. Consider whether there are new products and services they may need and appreciate.

Check on your competitors and suppliers. What are they doing to cope with a situation like the Coronavirus? With something like a pandemic, everyone is in the same boat. Join an association that will allow you to network and share ideas and experiences with other business owners.

Again, I would stress that you do not have to go it alone. Your local SCORE business counselor can be a valuable resource in developing a viable contingency plan.

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Gray Poehler is a volunteer with SCORE Naples and can be reached at Gray.Poehler@scorevolunteer.org. Business counseling is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit https://naples.score.org/content/find-mentor-165  SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.