What Can Las Vegas Businesses Do to Recover From the Pandemic

by | Jan 3, 2022 | News

The COVID-19 pandemic has not been kind to business owners. Hundreds of thousands of businesses were forced to close in the United States alone… with many never reopening.

Some of the businesses that did manage to stay open are still struggling and unable to achieve a pre-pandemic level of revenue. As we postpone certain tasks and purchases (who needs new shoes if you’re stuck working from home?), business owners are doing their best to make ends meet.

Las Vegas has, unfortunately, been topping lists for permanent business closures, but this article applies to all businesses throughout the United States.

How can businesses recover from the pandemic?

There is no secret formula to recovery. Some businesses, such as movie theaters, may never be the same again. On the flip side, businesses enabling remote access to products or services (video conferencing, telehealth, virtual customer support, contactless shopping) are taking the pandemic and using it as a catalyst to speed up growth and profit.

Many companies have had to pivot and adjust to the “new normal” – so we can say that flexibility is definitely a common denominator among the businesses that are still flourishing. Things you would never expect to be sold in a “get it delivered model” – such as cars! – are now available with the click of a mouse, without ever leaving home.

While everything depends on your industry, business model, growth trajectory, the economy and the state of the job market in the upcoming months, here are a few tips on increasing your cash flow, gaining new customers and overcoming the hurdles set up by the pandemic.

Cut back on unnecessary spending

Analyze your company’s monthly spending and look for unnecessary costs. Are you paying for any subscriptions you barely use? Can you switch monthly subscriptions to annual and score a discount? Can you renegotiate your rent or other contracts? Is there a technology you’re paying for but your customer base never (or rarely) takes advantage of? Perhaps your office has been sitting empty for the past two years and it would make sense to downsize (or even get rid of it altogether)? You might be surprised with all the superfluous expenses you find!

Obviously, this pertains to unnecessary spending. Please do not cut back on necessary spending – such as coffee for the break room.

Prioritize your time

Small business owners usually wear many hats as they strive to oversee all business operations – from sales, to marketing, to accounting, to that never-ending influx of emails.

If you’re the best salesperson on your team, and sales are what brings in the most much-needed cash, you should be focusing on sales and delegating all other tasks.

Pay attention to where you spend your time, so you do not waste it: there are only 24 hours in a day!

Have simple, online purchase and communication options

Because many people are no longer willing to venture outside to do their shopping, having an e-commerce website and online customer service options has become very important. Everything from groceries to cars is now sold online and available for “contactless delivery”.

Take a look at your website. Is it easy for clients to see your products and make a purchase? Do you offer enough payment options? Is there a form your contacts can fill out to reach your business, or a chat option? Are your product photos outdated?

Everyone wants to have a pleasant and simple online experience when making a purchase. Updating your website and communication options can make a world of a difference for small business owners.

Government agencies… to the rescue of small business owners!

The CARES Act and other pieces of legislature introduced quite a few programs to help business owners during the pandemic. Although the better-known programs have, unfortunately, ended or been phased out (including the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL), and Employee Retention Tax Credits (ERTS)), some opportunities are still available.

As an example, Taxpayers can carry back Net Operating Losses (NOLs), arising from tax years beginning in 2018, 2019, and 2020 for 5 years. This means that if your business suffered losses in, e.g. the second quarter of 2020, but made a profit in e.g. the second quarter of 2019, you may be able to amend your 2019 tax return and deduct your losses from previous years’ profits.

Similarly, if you qualified for ERTS during the time the credits were available, but did not take advantage of them, you may still have time to claim these credits retroactively.

There are also many smaller programs that give loans or grants to business owners who qualify – Grants.gov is a large database of grants offered by various government agencies, such as the U.S. Department of Education and the Department of Veterans Affairs. Not every business will qualify for a grant, but it’s worth looking into it.

Knit a tighter relationship with your customers, clients or patients

Nurture your current customer relationships – they will be your best source of referrals, positive online reviews, and they will keep coming back to you if you treat them well.

Perhaps it is time to start writing a monthly newsletter with your latest updates, just so your clients do not forget about you? Perhaps it would be a good idea to give some TLC to your social media pages, and engage with your followers? Another good idea might be offering a client discount.

Because people who bought from you in the past know how amazing your products or services are, reengaging them in a friendly manner could make a world of a difference to your bottom line!

Hire the right employees and contractors

We’ve all had bad experiences with less-than-stellar employees or contractors. When every cent counts, we need our entire team to be on top of their game.

It might be a good idea to assess whether every member of our team deserves to stay on our team. Is your marketing firm bringing in tangible results? Is your accountant making themselves available to answer your questions about finances, tax reduction, or regulatory changes? Is your sales team overcoming the challenges caused by the pandemic? Is anyone trailing behind the rest, and should be let go?

It might also be a time to hire new team members. One such team member might be an outsourced/part-time Chief Financial Officer (CFO). These professionals specialize in lowering expenses, identifying a firm’s “problem areas”, increasing net profits and revenue, assessing a company’s financial health based on sets of data, helping with cash flow, helping a business lower their taxes, in addition to many other invaluable services. They can also make sure your accounting is in great shape.

Spend money to make money

This cliché is an oldie, but a goodie. Many business owners faced with cash flow problems automatically pause their marketing and advertising. Perhaps they lay off some workers. Perhaps they start doing their own accounting, or filing their own income tax returns. They may search for the cheapest distributer or importer for their goods. They may chose to hire the least expensive contractors and consultants. They cut corners.

Unfortunately, you often get what you pay for. A struggling business owner may lose the little sales they have if the quality of their product or service suffers as a result of “cheap” supply and labor.

As for pausing advertising campaigns, Henry Ford said it best: A man who stops advertising to save money is like a man who stops a clock to save time.

Lower your taxes

Take advantage of tax reduction planning and tax optimization to lower your tax bill and reinvest the saved funds back into your business – your marketing, products, retirement or infrastructure.

There are many federal and state tax breaks small businesses (and medium-sized businesses) can take advantage of, if they qualify. One example are Research and Development (R&D) tax credits, available to any business that creates or imrpoves upon a product, process, formula, software or service. These credits can have a huge impact on a business.

Another example could be staying on top of your deductions – depreciation, mileage, business travel, home office, professional fees, continuing education – all eligible business activity can be, and should be, deducted.

In addition to credits and deductions, it might be a good idea to consult a professional tax reduction strategist who helps businesses (and business owners!) optimize their tax liability. Small businesses can save anywhere between tens to hundreds of thousands of dollars in taxes by employing tax reduction strategies. And is there anything sweeter than a refund from the IRS?

Don’t procrastinate

Business owners are busy, but some things should not be left until the last moment, especially things pertaining to taxes or finances.

As an example, if you need to lower your tax liability or are expecting a large injection of income, do not postpone speaking with a CPA until December. Your options may be limited, nonexistent, or you may have to rush a very important financial decision due to deadlines.

Keep an eye on data

Keeping an eye on finances and your profit and loss statement are a given – but money is only part of the equation.

Has your website had a decrease of visitors despite a steady marketing budget? This could mean your ad content needs to be refreshed, or maybe a competitor has entered the market. Has your sales team been making fewer sales despite a constant flow of phone calls? Perhaps your pricing needs to be adjusted. Have your newsletter opens dropped? This might mean your content is no longer relevant to customers or not very exciting. Have fewer people been responding to your ads? Perhaps there are too many advertisers in your space, or you need to come up with new ways of advertising – such as sending physical letters instead of emails.

The more you know about your customers and their behavior, the easier it will be for you to reach them.

Have an emergency plan, and an emergency fund

The terrible thing about the COVID-19 pandemic is that it caught all of us off guard. No one was expecting the world as we know it to come to a complete stop.

Now that we know that a series of unfortunate events may pounce upon us at any time (next time it might be dragons), let’s try planning for the eventuality.

Brainstorm a plan of action for the next emergency. Analyze what is not going right this time around, and think about improvements. Perhpas your team’s productivity has dropped as a result of working from home? Learn how to monitor and motivate your team remotely. Perhaps the technology you currently have in place is not suited to complement the “remote business” model. Would upgrading from a desktop to a cloud-based version of software increase your productivity?

Finally, set aside a fund to keep the lights on if the dragons every do come.

In summary, your business can recover from the changes brought on by the COVID-19 pandemic, though recovery may be a slow and difficult process. Cut back on unnecessary spending, prioritize your time and money, and create a business plan. Don’t forget about the government and private programs created to help business owners in these difficult times. Have the right team, including a great CPA, who can potentially help you lower your taxes and help you increase your net profits. Have an emergency fund – and don’t procrastinate!