June 9, 2020 By SmartBiz Team

With millions unemployed and local economies suffering, the current pandemic is revealing just how critical rainy day funds can be in an organization’s survival. Money management and future planning is important in the long run, but what can businesses do now to make ends meet in the middle of a crisis?

Here are some short-term, actionable budgeting tips to help business owners stay afloat, and ideas on how to set a small business up for long-term financial success.

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When faced with a financial emergency, it’s critical to act right away to gain control of your resources. Audit your budget and expenses to understand where your money is flowing.

Evaluate your revenue

Your new budget must depend on the amount of money coming in, which is likely to be disrupted during a crisis. Your first step in restructuring your budget should be to take stock of your new financial situation. Is there enough money to pay all employees, or will you need layoffs in order for the business to survive? Can you continue your marketing strategy as is, or will you need to move toward cheaper forms? In what state is your business debt? Are there ways you can better manage that for the time being?

These are important questions to ask yourself so you can ensure that, when reorganizing your budget, money is being funneled to the most productive areas for the greater good of the business.

Cut unnecessary expenses

All businesses have money flowing into numerous areas, some critical, some a little less so. Expensive client lunches, for example, can be important in securing a sale or building relationships during normal business periods but isn’t a necessity in order for your organization to survive right now.

During a crisis, it’s important to cut any unnecessary spending so you can staunch the flow of money out of your business. Perform a thorough audit of your business’s current spending so you can find areas that can survive a budget cut and others where your funds should be directed.


If you’re struggling to make rent on your office space or pay some debts, it’s better to be honest from the get-go to avoid longer-term problems. Lenders might be able to offer forgiveness programs or extend your payment period until you’re able to get back on your feet.

Alternatively, you should ask questions of your financial partners to see how they can help you. Maybe your company credit card has cash-back programs that could filter some extra money into your budget, or maybe your bank is waiving fees during the pandemic. It certainly doesn’t hurt to ask, and it could actually help you maintain your typical business structure.



Moving forward, crisis planning and financial management for small business owners should be a priority when restructuring a business.

Restructure your finances

If you’ve been forced to abandon your normal business structure, product, or financial structure, you’ll likely need to start from the ground up. When you reopen, treat it as if your business is starting fresh- use your new insights to write fresh goals and structure that will help your business grow post-crisis. This time, ensure you’re doing it right; revisit how to start a business effectively so you’ll remember how to properly calculate cash flow and write a business plan that includes a budget built to better support your organization’s evolving needs.

Create an emergency fund

A global pandemic likely wasn’t part of your business planning. Unfortunately, there are countless factors that could affect an organization’s success, which is why it’s important to expect the unexpected. Create a rainy day fund to lean on if you’re ever faced with another recession or unexpected financial hit.

Once your business is bringing in more revenue, set aside 2-3% of your profit every month into a high-interest business bank account. Access to this fund will buy you time to refocus your business plan if it’s ever needed.

Perform 90-day reviews

Moving forward, it’s critical that you keep an eye on your finances and ensure they’re staying organized. Quarterly reviews of your budget will help you stay closer to your budget, make more informed decisions around where to funnel your resources, and evaluate your financial progress. Every 90 days, review your goals and whether or not you’re on track to hit those, which will inform your next steps.

Crises can test the patience of many small business owners and their ability to lead through chaos. However, with some budgeting and smart management, you can help your business survive hard times, and develop good habits to thrive in the future.