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Hey studio owners, one of the mentioned, one other quick tidbit for you for some things that you ought to be thinking about. If I had a lease, like most of you do, the first thing I would be doing right now is contacting my landlord. First off, even if you think you might still be open or you might still be okay to make your rent payment, I want you to consider all moves that you can to conserve cash. At the moment you don’t know how long this is going to last. You don’t know what’s going to come up. So we want to be very cautious about spending money right now in dealing with the landlord-tenant situation. Most cases now I’ve seen a few cases, but in most cases, your landlord is not going to come to you and say, Hey, would you like some free rent?
What’d you like to not pay me this month? They’re not going to do that voluntarily. And if you wait until everybody else has already got their free rent, you might not get it. So I would suggest proactively talking to your landlord, no matter how big, how small and the situation is going to be different for each one of you. Talk to your landlord, tell them, Hey, I’m closed or I only have limited pickup. I’m only able to do certain amount of business and things are very tight. Obviously they’re going to know that the situation is rather extreme right now and ask them if they would be willing to help out. The first thought I would have is ask for a month without rent or two months without rent. If they can’t do that, let’s think about what else can be done. Maybe get a little creative, ask for some payment terms.
I’ve seen payment terms where people were saying, can I spread the next two months rent out over the next year and just pay you a little bit extra starting in my June rent. If not, maybe you can deal and ask for April and May rent-free, but tack on an extra two months to the end of your lease. Look for creative ways. But the first thing that you must do is ask. Ask them what you can do. Tell them it’s going to be very difficult. You’ve got people who are going to be out of work. You want to make sure that you can survive this and reopen after you’re permitted to do so. It’s in the landlord’s best interest to work with you to make sure that you can reopen because they don’t want to have an empty spot and not get paid in your absolute worst-case situation.
Make your own payment terms. If your landlord will not agree to any and you cannot make the rent or it’s going to put a hardship on making your payroll and the rest of the expenses for the month. Make your own terms. I know it’s a hard situation, but you may have to do that and you can always make situations happen after the fact to get called up and maybe you’ve got a penalty here or there or a late payment, but that’s better than not having the cash to turn the lights back on when we do come out of this.
So let’s be positive. That’s, think proactively, let’s communicate upfront with the landlords and see what can be done. You’d be surprised when you ask, things can do usually happen and you open those lines of communication. So with that, take a little action today. Move towards the next step. I know things are tough, but we’ve got to think about what we’re going to do when we come out of this, so plan for that now. Thanks. I’m Donna Bordeaux with PYOP Accounting.com .
Donna Bordeaux, CPA with PYOPAccounting.com.
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna Bordeaux and PYOP Accounting.com. Donna and her husband, Chad, who is also a CPA, have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help PYOP studios earn 4 times more profit than the average PYOP and are passionate about helping industries that help families build great memories.