By Alan R. Sasserath, CPA, MS
We hope this finds everyone safe and healthy.
To some of us that owned our own business in 2001 (9/11), 2008 (Financial Crisis) and 2012 (Hurricane Sandy), the current economic situation looks and feels familiar, not good, but familiar. Maybe there is more uncertainty now? I don’t know. I do know that just like those periods of uncertainty and darkness, we will recover. Whether the recovery is slow or fast, now is not the time to panic, but rather a time to plan and execute. For many of us, 2020 went from a time to thrive to a time to survive over a matter of days. For those in that situation, we need to put a plan in place to get us through this period of uncertainty until we are in a place where we can, once again, thrive.
There is no one-size fits all answer to the issues that we face, however, there are some things that we all must do to keep moving forward. Below are some key points that everyone should address as they apply in no particular order. Please note that the foundation to all of the factors below is communication. Communication with clients, vendors, staff/team, finance, legal, … Communication should come from one source and be consistent and honest.
Customers: What are they going through and how will the current events affect them? Are you in a position where you can help them through their issues? Now is the time to get closer and not more distant.
Vendors and Supply Chain: Continue to monitor the supply chain and be realistic with your expectations of your own output. Do you have commitments? What are they? What needs to be done about them? If your cash flow budget says that you will need to adjust payment terms, have you discussed this with them?
Cash and finance: What does your projected profit and loss statement look like? What are your fixed expenses? How can they be reduced or utilized in another fashion? What is your current cash position? What does your cash flow budget look like – short and long term? What access do you have to credit facilities? Once you have these answers, have you spoken with your bank? Are there any programs that can help you get through this challenge?
Team/Staff: Your team is what will get you through this challenge. You need to be consistent and honest with them. There will be some tough decisions to be made in the coming days/weeks. Our experience is that if there needs to be a lay-off or an hours cut, to do it swift, to do it at one time and then once it is done, call everyone together and let them know that it is over and we are prepared to move forward.
IT Management/Security: As many of us move to some or all of our team/staff working remotely, security risks increase. What can be done to minimize the risk? Two-factor authorization? Are your IT advisors giving input to minimize security risks? Understand the risks and act accordingly.
We continue to prepare to work remotely, but the majority of us continue to work out of our main office. This may change as more information becomes available.
We also continue to monitor government updates and programs:
- Attached is a summary of some of the provisions that may affect you from the Bill that passed the House of Representatives this weekend: H.R. 6201 – Families First Coronavirus Response Act. The Senate is expected to vote on this shortly and is currently discussing additional aid to be offered. This Bill will most likely change before it becomes law.
- All indicators point to an extension of the April 15th tax filing deadline by as much as 90 days. We are hopeful to hear definitive news on this by the end of this week.
Don’t be afraid to ask for help. Continue to review the information available to you and to make decisions to move your company forward.