Part 5: Your Business’ Rapid Response to COVID-19: Communications, Special Projects and Looking Forward
Over the past few weeks, we have been posting about the steps businesses should take in response to the new challenges resulting from COVID-19. By now, you should be aware of the government and private programs and resources available to businesses and have applied for those that best suit your needs; dealt with employee issues including reductions to your staff; and closely examined your cash flow and taken measures to preserve as much cash as possible.
Before we turn our attention to planning for the future (our next blog series), we want to address a few issues that might still need your attention.
In Part 2 of this blog series, we discussed that ongoing communication with your employees is critical during this time. You should also be in regular communication with these key groups:
To be efficient, you must understand what is happening with your customers’ businesses. Their demand drives your business and helps you chart your future course. Some customers will come back sooner than others. Through your communications, you will know who is likely to return first and can plan accordingly.
As with your customers, you must understand how the ramifications of COVID-19 has impacted your suppliers and what their short and long-term situations look like. Now is the time to familiarize yourself with alternative suppliers and know their capacity – by communicating with them.
Good communication leads to better working relationships. When business does come back, you will want your orders at the top of your suppliers’ fulfillment stack.
You should also be in regular communications with your banker, lenders, etc. eep them informed on your current performance as well your plans for recovery. This will greatly help in extending or getting new loans and financing.
If you have an SBA Payroll Protection Program (PPP) loan, be sure to talk with your lender about its specific documentation requirements, restrictions as to how the funds may be used, and other forgiveness expectations. Some PPP requirements are open to interpretation so be sure you and your lender are on the same page. (We’ll be blogging more about PPP in the coming week.)
Other Things to Consider
Check your renewal dates. You may want to ask for extensions or renewals. Some carriers are doing ‘rate passes’ if you agree to forego the bidding process. This will free up your time to focus on other things.
If you have laid off or furloughed employees, your current employee numbers and/or payroll forecasts may result in lower rates.
If offered, take the “pay over time” option vs. making lumpsum payments for your insurance.
Read our recent blog post on COVID-19 and business interruption insurance for information as to whether this is an option for you.
Legal, Special Projects, Marketing
The closure of many courts may have already put ongoing legal matters on hold. If not, we encourage you to consider pausing your legal work through whatever mechanism your legal counsel recommends. Not only with this save you money, it will also free up bandwidth for you to tackle other issues and focus on your recovery.
Special projects should be evaluated on a case-by-case basis. Move forward only with ones that are absolutely critical. Carefully weigh the costs of what outside consultants may need from your employees and infrastructure to continue working on a project. Don’t let ‘sunk costs’ – costs you have already spent to date – effect your critical thinking. If a project isn’t currently the highest and best use of your cash, it’s probably best not to move forward.
Keep marketing. Your visibility is still important to maintain market presence. Customers need to know you are still up and running and are still a resource for them.
We’re here to help
Next week, we will be posting more in-depth information about PPP loans, conserving your cash and other current, important topics that are crucial to your business.
PBO Advisory Group is here to help. Please contact us with any questions. We are all in this together.