Holiday creep. It’s real.
Here we are in early November, and it feels like Christmas decorations and other holiday chicanery have already been upon us.
San Francisco Bay Area retailers are buckling in for what looks to be a rough shopping season, given current economic factors… BUT per the U.S. Chamber of Commerce, over 30% of consumers got a head start on their holiday shopping in October.
What have you noticed? How is your holiday revenue rhythm looking relative to other years? Would love to get a feel from my own contacts about this.
By the way, here’s a good rundown of how big corporations are approaching this season.
But back to you, and to us.
We can take a look at your cash flow, and pricing structures to help you have a clear picture of where things are at and how to get them holiday season ready. That’s just one of the things we can discuss. Use this:
Patti (408) 775-7790 Gale 408-775-7800
So I wanted to offer a quick primer on how to handle things when you’re facing difficult choices about your cash flow including which bills to pay when.
And again, if this matches your circumstances, we might should talk. There are probably some things that we could do to help.
Which Bills to Pay First in Your San Francisco Bay Area Business
“A lot of talented actors still have to pay their bills.” – Mark Wahlberg
Sometimes it seems like bills come through the door as much as customers do … And knowing which bills to pay in which specific order can be difficult.
And just like some customers are worth more than others to your small business, some bills need quicker attention than others as well. You put things in priority order for your company every day. You should do the same for your expenses.
We’ve got some thoughts on how to do that.
Which bills to pay first and why
You’ve heard about keeping the lights on? It’s true. Whether your business relies on the internet, machinery, handwashing, or heating, your utility bills have to be near the top – if not always first – on your pay list.
You also need a place to work – there’s no debate if you arrive at the office one morning and find the door padlocked. Pay your rent.
Now for bills that can have wiggle room (but precious little of it):
- Taxes. Fines and penalties are the stick for taxes. Fail to pay property or income taxes, fail to remit the sales or payroll taxes you’ve collected, and government action will be swift. Pay taxes, because they’re not going to go away. Also remember that what you collect from federal payroll taxes – Social Security and Medicare – and state sales and income taxes does not belong to you, no matter how much they look like some bonus fund you can borrow from.)
- Payroll. If you’ve had to ask your employees to take a haircut – or worse – over the last few challenging years… you’re not the only business owner who had to. Maybe your staff accepted it, and maybe they didn’t. Maybe they’re looking for something else and not telling you (a safe assumption).
- Important suppliers. You depend on these people (maybe more than you realize), and replacing them might be hard (if not impossible) these days.
- Past-due bills. Timing is a big part of paying all your bills – and you should realize that your clock’s running out for dealing with creditors who’ve sent you multiple notices. Anybody who lets you know you’ve owed them for two months or more has already been patient – it’s time to move them up on your priority list.
A couple notes: Not all debt is created equal. Credit card debt can require a judgment against you for collection – a long process for most creditors. Large bills do more harm to your credit score if they go long overdue.
Your responsibility for debt can vary in severity depending on your business entity. If you have a sole proprietorship or partnership, for instance, you’re personally liable for all your business debts – assets such as your home might be on the line. If your business is a corporation or LLC, you’re only liable for the debts that you personally guaranteed. Collateral on loans is another matter.
Communication and payment plans can be your best friends when you’re trying to pay off bills.
Utilities. Most utilities are open to the idea of a payment plan, particularly if you’ve paid your bills regularly in the past. Be advised to monitor your energy use going forward and cut back wherever you can (like turning down the heat or not leaving windows open with the air conditioning on).
Is your plan based on your future usage or on an average? Make sure that you aren’t shocked with a huge bill for excess energy use at the expiration of a payment plan.
Taxes.Much as tax authorities have broad powers to seize just about anything, they also have a variety of payment options for tax debt, including installment plans, negotiation tools like a federal offer in compromise (if your debt’s big enough and if you qualify), and avenues to dispute your debt. (We can help you find these.)
Rent.Maybe your landlord has a kind heart. Failing that, maybe your area has a rent assistance program for businesses that have fallen on hard times. These exist on the federal but just as often on the state, county, and city level. We can help you find one you qualify for.
Payroll. Aside from pay cuts, one of your next options for saving on payroll is layoffs. The savings are quick and obvious, and you may be able to redirect your payroll costs toward new and cheaper or part-time staffers. On the other hand, layoffs can make remaining employees jittery and insecure – and eager to look for a new job. They also open the door to poorer customer service and even discrimination lawsuits.
Finally, what can you cut back on? One possible expense: insurance. Your business may not be able to function without certain coverage, such as professional liability, but missing one premium isn’t likely to torpedo your entire policy. And longer term, rare is the policy price that can’t be improved with negotiation, bundling, or research into cheaper options.
Getting your bills paid is an essential part of doing business. And figuring out which bills to pay when is an essential part of your San Francisco Bay Area business’s financial well-being, especially when we approach busy seasons like this one. Every business’s situation is unique, and figuring out what’s right for yours takes some thoughtfulness. If you need a little mental support on that front, we’re right here.
You can depend on us,
Patti ONeill and Gale Bergado
ONeill & Bergado