If you have a stake in a business right now, or are an advisor to business owners, it might feel like the “it’s the end of the world as we know it.” But even amid a global pandemic, it doesn’t have to be that way…
… After 30 years as a Crisis Management and Turnaround consultant, I have helped troubled businesses of every size successfully navigate their way through tough economic challenges, changing landscapes and difficult situations of every kind. I have also advised numerous healthy companies how to poise for growth while safeguarding against a possible downturn.
But based on the numerous calls I’ve been getting since the nationwide lockdown, it’s clear that no amount of planning could have adequately prepared any business for something like this. Owners and company executives are scrambling to find ways to weather the storm. It’s easy to panic, but I know from experience that it’s possible to keep your head above water, even in the worst of situations, if you follow these steps:
5 simple steps to keeping the pandemic from permanently infecting your business:
1. Apply for Government Assistance: If you haven’t done so already, don’t wait another minute to go to covid19relief.sba.gov to apply for an Economic Injury Disaster Loan (EIDL).
- Click here to download the US Senate Small Business Committee – The Small Business Guide to the CARES Act.
- Click here to download the US Chamber of Commerce – Coronavirus Small Business Loan Guide.
The Paycheck Protection Program (PPP) loans are available through your bank. You should contact your banking officer to begin the PPP loan process. It will also pay to determine if your business could qualify for low-interest-rate loans and if your state or county might allow you to defer tax payments.
2. Reduce Expenses: Inform your vendors and suppliers to whom you owe Accounts Payable that you are doing all you can to keep them paid, but for the interim, as you put your plan together, you might have to delay or extend payments to them.
Consider what expenses you can reduce, put on hold or cut indefinitely, such as new supplies, capital and/or marketing expenses. Also, determine is you can return unsold items or negotiate with suppliers or vendors who may be willing to be flexible during these uncertain times. And, as a last resort, consider temporary pay cuts for top management and if necessary, reducing the hours of other employees to help keep your entire crew afloat.
3. Increase Revenue: Now more than ever is the time to get creative. Does your business offer opportunities for doing business online? Are you able to provide curbside service, delivery or can potential clients email or text photos to get a quote? Do you have equipment that can be converted to manufacture items needed during this crisis?
According to the New York Times, automakers, fashion designers, furniture makers, tech companies and others have been rushing to manufacture and distribute masks for example – “part of a growing and improvised effort to increase the supply.”
4. Follow up on Accounts Recievable: Don’t get so caught up in how you’re going to pay your bills that you neglect to send invoices or collect overdue accounts receivables. Be prepared to negotiate with your customers who may be in the same boat as you are. Collecting some money is better than none.
5. Use your Credit Lines: Now is a good time to take advantage of historically low interest rate levels.
During this critical time, having a team of seasoned professionals who understand how to rapidly and successfully triage any situation, ask the right questions and build a corps of experienced profitability advisors to create and carry out a solid plan, can make all the difference between solvency and bankruptcy.
New Growth Advisors has been providing consulting services to companies with annual revenues ranging from $5 million to more than 1 billion, and has been providing proven turnaround consulting, interim CFO and management support and fiduciary services for hundreds of clients in more than a dozen states for two decades. Feel free to contact us if you have any questions regarding how your company can get through the current crisis and look forward to the opportunity to help you in your efforts to weather the storm.