The current situation is challenging for every one of us, even the most relaxed people I know start to struggle and shake and are worried about the future. If you are running your own small business or work as a freelancer the level of uncertainty you are experiencing at the moment may be higher than the „usual“ ups and downs. In this article, I want to share some ideas, insights, and sources for further information.
First of all, you are not alone there are literally millions of small businesses and solo-entrpreneuers who are in a difficult situation. Many restaurants, bars, and shops had to close, no cash flow is coming in while the rent and the salaries for employees still need to be paid. In my hometown, I am observing a massive increase in creative solutions. Restaurants are offering new delivery services, my favorite flower shop is delivering her beautiful bouquets, companies build alliances, and support each other. I think this is such a wonderful development we don’t see each other as competitors anymore we just think about a solution and help each other out. We go and buy groceries for our neighbors and one of my friends is providing homeless people in Frankfurt with food. Think about what you can do at the moment? How can you help your community? Can you continue to deliver your services or offer your services online? What do you need to restructure? With whom could you team up with to create a new service? If you are leading a team, talk to your team and ask them for their ideas and work together!
One very practical thing you can do is to get in touch with your tax accountant (if you have one) or to get in touch with your local fiscal authorities. As a small business/freelancer you have to make a quarterly advance payment of income and business tax. In case you are expecting your turnover to drop in the next couple of weeks, you should limit the amount of pre-paid taxes in order to improve your cash flow. If you are paying back a loan you can get in touch with your local bank and discuss options to pause the monthly payments for the time being. The same process also applies to your health insurance. The fee for your health insurance is a percentage of your net income. You can get in touch with your insurance company and discuss options to reduce the average monthly net income and therefore reduce your monthly payments.
In addition, the German government is currently working on a massive support package for all small businesses and freelancers. Companies with up to 5 employees can apply for immediate aid up to 9.000,00 EUR (This amount does not have to be paid back). You can also apply for a loan up to 10K which will be covered by the government. This loan will be free of repayment and interests until the end of 2021 and with a total duration of 6 years. As Germany is a federal state these support packages will be distributed and organized by the state you live in or that your business is registered. It’s definitely helpful to go to the website of your local state government to look for more detailed information.
I really hope that this article helps you to find your way and that you and your business stay safe and healthy! If there is anything I can support you with, please feel free to contact me at any time!