Scared To Take the EIDL Money and Use It Wisely?
A couple of weeks ago, I covered making the choice to accept Emergency Injury Disaster Loan (EIDL) money, and got into some of the nuts and bolts of what that might mean for your business.
If you’ve been offered EIDL money, you might still be on the fence about it. Maybe you’re scared that, if you don’t use it right, the IRS or the bank may get into your business. I’ve heard some people (smart, successful, and accomplished people) say, “I’m just not going to take the money, because I don’t know what to do with it.”
To which I say…opportunities like this don’t appear that often, and now may be your chance to invest in your business in a way that you’ve never been able to do before. Don’t waste this chance to give yourself an advantage (and the capital you will need) in the potentially hard times to come.
What hard times am I talking about? From expert analysis and the stories we’re seeing on the news, in a few years, we could be in a recession or even depression economy. The businesses that not only survive, but thrive, will be those that are able to invest in growth if and when that happens.
So how do you do that?
Now is the time to identify the leaks in the foundation of your business, shore them up and be prepared to grow from solid ground.
The biggest reason that most small businesses fail, especially in a time of crisis or challenge, is because of a faulty foundation that isn’t seen until a time of crisis.
Maybe you are seeing that yourself right now. Maybe you were going along pretty well until COVID, and all the sudden—blammo! Crisis. You got to see all the leaks in your foundation that have kept you from being able to stay in business, earn money and serve your clients. Maybe you are also seeing that some of your competitors are growing more than ever and thriving during COVID. Why is that? It’s because their business didn’t spring a major leak, so they were able to show up and serve.
So, if you want your business to be well-prepared for the next crisis or challenge, use your EIDL money to identify and shore up the leaks in your business.
First, and foremost, do you have the right income model? Are you selling your services or products at the right price to the right people? If not, use your EIDL money to get that dialed in. If so, the next place to look is whether you have the right marketing and sales systems in place. If not, that’s the next place to get dialed in.
Then, once you’ve got that dialed, it’s time to look at your legal, insurance, financial and tax (LIFT) systems.
Are all of your legal structures in place, solid and secure? Entity up to date? Contracts clean and clear? Intellectual property protected? Employees structured properly? How about insurance? When was the last time you looked at your business insurance? Your life insurance? Your disability insurance?
Financial systems telling you what you need to see each day, week and month so you can feel confident about the strategic decisions you are making, and will make, when the market turns again? Or, is now the time to get the right financial team in place to support and guide you as things shift?
What about your tax systems? Are you keeping your profits low so you don’t pay much in taxes, or are you way overpaying because you just don’t know what else to do? Now, you might say, “How are any of these things going to keep me in business if we go into a recession or depression?” Well, my friend, it’s the businesses who have solid LIFT systems set up around a solid system of serving clients or selling products at the right price that are able to weather any storms that come their way.
You can have the best product or service, but without the LIFT systems to support them, your business will eventually collapse under the weight of the issues that come.
So, use your EIDL money to shore up your income model and your LIFT Systems. It’s a great use of this low interest “working capital” loan the government is providing that we’ll never see again in our lifetimes.
If you aren’t sure where to start when it comes to finding the leaks and shoring up your LIFT systems, call us, as your Creative Business Lawyer®, and we’ll take you through our LIFT Business Breakthrough Process with a 20pt Assessment of your LIFT systems + a an audit that shows you exactly what you’ve got, what you need, and how we can help.
This article is a service of Greg Gordillo, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Schedule your LIFT Session here.