After the Covid-19 Shock, What’s Next for Your Business?

After the Covid-19 Shock, What’s Next for Your Business?

You have made the initial quick adjustments to your business to deal with coronavirus shutdowns and covid-19 shelter in place directives.  Hopefully your business is stabilized for now and everyone is safe.   But for most businesses the future is unlikely to look like the past.  For most business owners determining and preparing for changes as the ramp-up back from the coronavirus shut down begins is unclear.

How do you prepare your business, including your employees, customers, suppliers, and others for the future with all this uncertainty?

  • Business planning, strategy, and role playing after covid-19.  Develop a simple easy-to-adjust cash flow projection, key indicators, and bullet point improvement plan for the next 12 months. Overly complex projections will actually impede what needs to be understood.  A simple model that captures the big risks and rewards is perfect.  In the end you want to develop a few pages you actually use.   Run “Best”, “Likely” and “25% below the worst you can imagine” scenarios. Look at how to increase revenues and cut costs.  Work it through to staffing, possible renegotiations on fixed costs, etc.  Bounce this off trusted family members, key employees and advisors.  Talk about it with anyone with business sense you respect and trust that will work through it with you.  This will open up possibilities and solutions so as things happen (good and bad) you will have already given thought to many situations and can make decisions from a place of reason, not just emotion.
  • On a daily basis monitor sales, variable expenses, and cash (as necessary).  Revenues and cash flow are the equivalent of blood.  You must keep some in the business and stay focused on small day to day matters that improve business sales, reduce expenses, and protect business cash flow.
  • If possible, particularly for businesses with substantial contracts, keep your fingers on future sales. Stay in touch with key customers, key suppliers, and politely ask difficult questions essential to your survival.  Is the contract funded?  How will future payments be made?  How is timing of awards in the pipeline expected to change? Are suppliers able to perform?  etc.   For many contractors and others, status WILL change over time as your clients better understand how the response to coronavirus is affecting them and adjust.  Check at least monthly.  Check more if that makes sense.  Make tough decisions early.  Don’t delay.
  • Grow key people. Now is a time where they can shine.  How can you help them take the next steps in responsibility and decision making?  Adjust systems for virtual workers and actual volumes to keep control but not over-control.
  • Communicate and Lead. Leadership counts in times like these.  Covid-19 is scary particularly where many people are infected and ill.  What specific measures are your business instituting to keep people safe?  A communication vacuum allows fear to grow.  People want to know how they are going to come out of this crisis.  What is the plan today, tomorrow, and the next day.  They also realize plans are going to change as necessary.  Treat your employees like the adults they are.  Deliver bad news with empathy and include what is being done to overcome obstacles.

Planning sometimes seems like a silly thing in a crisis but it is your chance to work through options and generate ideas early.  Like the Boy Scouts always said, “Be Prepared”.   That is still very good advice.

We have communication, projection and cash flow tools and experience to assist you in your business planning and preparation. Should you be looking for guidance or support, please reach out.

Greg Caruso, JD, CPA, CVA  Partner, Harvest Business, LLC    |     609-664-7955  GCaruso@HarvestBusiness.com


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

SBA – Resource Round-Up – March 31, 2020

SBA – Resource Round-Up – March 31, 2020

The Small Business Administration now has a page on their website dedicated to Small Business
Guidance and Loan Resources regarding Coronavirus (COVID-19).

There you can quickly access information about:

Each local region also has resources available:
Maryland District Office
New Jersey District Office
Pennsylvania (Eastern) District Office
Virginia District Office
Washington Metropolitan District Office

In addition, the SBA is also offering regular webinars on applying for SBA Disaster Loans.

Be certain to check with your local and state Economic Development Administration for additional
support and resources. Many are offering grants to help businesses weather this crisis.

We are reviewing the CARES Act passed by Congress and will more to share about that legislation and
how it may benefit businesses very soon.

We hope you and your family and your employees are doing well and doing what you can to “flatten the
curve” to shorten this down time and return to normal soon. We are here and would be happy to
connect if you need to talk.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

What Now? Stay Focused… Keep Going

What Now? Stay Focused… Keep Going

Over the past several weeks I’ve been talking to business owners who are either current, prospective or past clients of mine about how COVID-19 is affecting their business.

I’ve been telling them while the number of buyers seeking information about businesses that are currently for sale has declined over the last several weeks, for the first 12 weeks of 2020, economic indicators consistently signaled a strong and growing economy. Rate of inflation has been: LOW. Unemployment rate has been: LOW. Housing demand is: UP. Consumer Spending is: UP.

Depending on the industry, some businesses, like commercial construction, accounting service firms, B2B and B2C services, certain IT sectors, and government contractors are still doing well continuing work on current jobs and submitting bids on future work. Other business owners, however, are now feeling the effects of COVID-19 on their business.

So, what should a seller or a potential seller of a business do until the COVID-19 curve flattens out and this problem virus is history?

    1. Continue running the business hard, fast and lean.
    2. Call and talk to all your customers. Ask how the virus is affecting them.
    3. Prepare a short-term cash flow forecast.
    4. Review your short-term business plan.
    5. See if your company can provide services and/or products to support the fight against COVID-19.
    6. Review your bank covenants.
    7. Contact your bank and other financial providers and obtain their continued support. In addition, financing and other assistance is being offered at the Federal and State levels.
    8. If you were planning on selling your business this year, prepare and place the business on the market now since it may take up to a year to locate the right buyer as the economy improves. Also, many people who have lost their jobs due to the virus will be considering buying a business as an option to finding another job. Banks are still lending and the U.S. Government, through agencies like the Small Business Administration and the Veterans Administration, as well as state governments will have programs to help buyers purchase small businesses. This helps both sellers and buyers.
    9. Connect with me at Harvest Business and let me help you if I can. Even if you just want to talk, I’m happy to have a conversation.

If you have a good business with consistently solid financials and strong business attributes now is a good time to think about your exit plan and perhaps even begin preparing to put your business on the market. Whether you want to sell your business now or at some later time, my best advice is to stay focused, keep going and use this time to plan for the future.

(If you find yourself with a little time, we wrote an ebook – “Ten Ways To Increase the Value of Your Business Before You Sell” – that might be the perfect thing to read!)

This post was written by Richard Stopa, Harvest Business Advisors Partner

Richard Stopa
Partner
Rstopa@HarvestBusiness.com
703-307-1187