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Some advisors may have the tough job of telling long-suffering business owner clients that it could be time to quit, which has been the case for thousands of companies during the pandemic so far.

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The COVID-19 pandemic has been brutal for many small-business owners, who have faced 18 months of lockdowns and other restrictions. Many have made it through by moving their businesses online, cutting costs, and taking on loans. But as the pandemic drags on, it’s becoming even more challenging to stay afloat, and many are turning to their financial advisors once again for solutions on how to outlast this crisis.

“Business owners are wearing multiple hats. Many of them are parents adjusting to working remotely, and it’s important that they have trustworthy advice they can rely on,” says Kate Murdoch, an investment advisor and financial planner with Ridd & Associates Wealth Advisory Group at BMO Nesbitt Burns Inc. in Newmarket, Ont. “Advisors should be able to take some of that weight off their shoulders.”

Ms. Murdoch says she believes advisors can help in three main areas: crisis management, risk mitigation, and strategic planning.

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Crisis management includes having an emergency fund to help tide them over during the leaner months, which she acknowledges could be more challenging at this stage of the pandemic for those whose businesses have been affected.

While it’s not usually the first choice for business owners, Ms. Murdoch says taking out a loan can be used in an emergency.

“During the pandemic, efforts have been made to make financing more accessible,” she says, including the various government programs. For example, the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy (CERS), and other government programs for businesses are still available.

Although the programs have been around for some time, Ms. Murdoch says some business owners are still unaware or unsure of how they work or even if they qualify.

“Advisors should be expected to step in and help their business-owner clients understand what programs are available to them, as well as their employees,” she says.

When it comes to risk management, Ms. Murdoch says business owners need to ensure they have updated plans to protect themselves and their businesses, including succession plans and shareholder agreements, should an owner become sick or even pass away.

Having the right insurance to cover a disability or death should also be discussed – and not just because of the economic and health threats that COVID-19 has caused.

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“The pandemic has created a need, but also an opportunity, to have important conversations around risk management,” Ms. Murdoch says. “It’s often in hindsight that many people think about these things, but it’s planning in advance – that’s the real value add [that advisors can bring].”

Strategic planning is more about looking for opportunities that may arise from the pandemic, such as expanding a business, making a pivot, or doing a merger or acquisition.

“That’s where advisors can step in and help with adapting to change, looking for new opportunities, or exploring creative business planning – especially because we benefit from being able to speak to so many different business owners and hear what’s working and what’s out there,” Ms. Murdoch says.

Robert Gauvreau, founder and partner at Peterborough, Ont.-based Gauvreau Accounting Tax Law Advisory, says there are opportunities for many business owners coming out of the pandemic once they can get past survival mode.

He says some business owners, particularly those who are nearing retirement, may be ready to sell their businesses or move on to something else, which is a chance for entrepreneurs to make acquisitions, take on new clients or expand into new markets.

“For those people who are surviving and have the energy, it’s going to be the greatest opportunity,” Mr. Gauvreau says, citing the example of industries like construction in which trades are in high demand as the building boom continues.

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“It has been a terrifying time for so many small businesses, but those who can make it through could have a new market that they can capture,” he adds.

The key for most business owners to keep moving forward is to ensure they have the cash flow to continue, whether it comes through financing, cost-cutting, or selling assets.

“Getting access to equity or cash will help them get through this,” Mr. Gauvreau says.

Meanwhile, Jason Heath, a certified financial planner at Objective Financial Partners Inc. in Markham, Ont., says some entrepreneurs have seen their businesses ramp up during the pandemic, which needs to be managed.

While he has seen some owners do “phenomenally well” during the pandemic, the momentum didn’t last.

“It’s also important for a business owner to understand that sometimes things don’t stay great forever,” Mr. Heath says, adding that advisors can help them invest that extra profit in a way that will benefit their businesses in the longer term, whether it’s making an acquisition, buying equipment, or simply stashing it away for a rainy day.

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On the flip side, advisors may also have the tough job of telling long-suffering businesses that it could be time to quit, which has been the case for thousands of companies during the pandemic so far.

Mr. Heath says there’s a point at which all of the cost-cutting and loan strategies – including taking out personal loans to fund the business – shouldn’t be recommended, especially if it could impact the owner’s ability to retire someday.

“Anybody who’s advising someone considering these kinds of measures needs to ask a reasonable question: ‘Is this something that’s going to be able to maintain and sustain the business or, is this a sinking ship where you’re better off winding things down?’”

Adds Mr. Heath: “You hate to be that person, but advisors are meant to try to provide objective advice and be a sounding board for somebody – and sometimes you need to be the voice of reason.”

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