In the current crisis, almost all entrepreneurs have to react very flexibly to the current situation. Politicians are also facing this challenge and are trying to master it. This is why the applicable framework conditions in tax and financial matters are changing almost daily.

Nevertheless, the following tips can be given on what you should do as an entrepreneur or self-employed person to overcome the crisis financially.

1. Keep a cool head. After the initial panic reaction, draw up a financial plan for the next six months that covers your capital requirements over this period. Compare these requirements with your secure income. But be careful! Plan "conservatively". Take into account possible order cancellations and payment defaults, because your primary goal in the short and medium term must be to secure your company's liquidity - even if things turn out worse than expected.
2. If you have an overview of your income and expenditure, check to what extent you can or even have to reduce your fixed costs in order to secure your liquidity and expand your financial scope, because: In global crises like the current one, you also have to expect the unexpected.
3. If necessary, try to suspend all long-term debts such as leasing agreements, loan repayments, rent payments, etc. in order to increase your liquidity. However, keep a certain amount of foresight. For example, make sure that you do not alienate strategically important service providers etc. that you will need to provide your services again after the crisis at the latest.
4. Set your tax prepayments to the tax office to zero and suspend your tax debts, such as your VAT debts. Your tax advisor will do this for you if you wish.
5. If a liquidity bottleneck threatens despite these measures, talk to your lenders, such as banks, as early as possible. Tell them openly about your situation. Don't shy away from this, because if your company is now in financial difficulties, this is (usually) not due to management errors. The banks know this too.
6. As a confidence-building measure, also hold such discussions with your strategically important suppliers. Try to agree more favorable delivery conditions with them - for example by extending the payment deadline. This is usually not a problem if they are liquid themselves and know that your company is actually healthy: Your company is actually healthy.
7. For larger orders, write small interim invoices more frequently instead of just one "fat" invoice after the order has been completed. This improves your liquidity and reduces the risk of you getting into financial difficulties if your customer has payment problems.
8. Agree short-time working with your employees where possible and necessary. If you have not already done so, apply to the employment agency for short-time working benefits. Your tax advisor will help you with the application.
9. To prevent companies or sole traders from becoming insolvent in the short term, the German government has adopted an emergency aid program for SMEs. Under this program, for example, companies in Rhineland-Palatinate with 0 to 5 employees can receive emergency aid of 9,000 euros, which does not have to be repaid; companies with 6 to 10 employees can receive 15,000 euros and companies with 11 to 50 employees can receive 30,000 euros. These sums vary slightly from state to state. Apply for this emergency aid if you are one of the companies affected by the crisis - your tax advisor can also help you with this.
10. In addition to the emergency aid, you can also apply for an emergency loan from your federal state if necessary. In Rhineland-Palatinate, for example, this amounts to a maximum of 10,000 euros for companies with up to 10 employees. In contrast to the emergency aid, the loans must be repaid. However, they are interest-free and repayment-free until the end of 2021.

Maintaining confidence as an entrepreneur

The current crisis is threatening the existence of small businesses with low financial reserves and/or high fixed costs in particular. However, there are a number of ways to counteract this and a range of government support measures. So keep your confidence despite the crisis. This is another characteristic of a good entrepreneur.

About the author: Karsten Freyer is the owner of the tax consultancy firm Karsten Freyer in Freinsheim (near Ludwigshafen). The business graduate and his 12-strong team advise many companies and self-employed people.