Small businesses and the impact of Covid-19 (Coronavirus)
Uncertainty fuels fear. As anyone reading this is aware, the human world is being swept off its' feet by a silent and deadly virus, with no boundaries. We are left to pick up the pieces and guess to what comes next, not just with our health, but every aspect of our day-to-day lives. Although these are scary times and life will forever be changed, I cling to my faith and the notion that human beings always endure. With that being said, I wanted to write a brief blog on how the Coronavirus is impacting small business in America and what it may mean for the market of buying and selling businesses over the next few months.
The next 60 days will test the foundation of all small business
My partners and myself have been blessed to have had great success throughout our young entrepreneurial journeys and as every business owner knows, we have weathered many storms along the way. Many of those speed bumps in the past could have been planned for or ultimately were resolved quickly, with minor "bumps and bruises." Whether it be competitors opening up next door, supply chain constraints and quality issues, market changes, employee turnover or even seasonality, we have faced and conquered many challenges. As we look at this new challenge, we can hardly call it a speed bump, and have no experiences to lean on as we navigate the uncertain path that Covid 19 has paved.
I foresee many small businesses that were already challenged in a booming economy not make it through this. I know many are facing the same challenges we are as revenue has come to a screeching halt but the responsibilities and "bills" are still coming due everyday. Luckily, we have built an infrastructure that is strong and our reserves are larger than most, but those reserves are short-lived. If what we are anticipating is true, fourteen plus days of almost complete shutdown, we can anticipate many changes in the marketplace, and many people to lose their jobs, or get laid off, temporarily. I am optimistic that the government will find a way to "bail-out" the small-businesses in America, as they are the backbone of our economy. We have seen recent bills being passed to take care of the workforce in our nation. In addition, the tax date was just pushed back to July 15 instead of the normal April 15. Until the consumers are taken care of, small businesses need to be proactive in their information sharing, collaboration, and get creative to how we can navigate this together. Flexible Work-share, Insurance Review, Real-Estate planning
I am blessed to have some very level-headed and intelligent partners that have set a course for our companies to plan effectively for this emergency. The theme that we have put together is to "get ahead of the curve," ideally the "flattest" curve there is. Nonetheless, here are some things to consider and get moving towards as the next few weeks, at minimum, will halt our economy completely.
Legal - Get with your legal team and make sure you are up to date on employee benefit packages, government assistance changes, regulations on personnel decisions and any law changes that may affect or ease the pain. You also should get with your insurance agent and understand business interruption coverage, if applicable.
Real Estate - If you own your property and have a mortgage, get with your loan officer and banking professional to understand what they are doing to assist. If you are leasing, make sure to get legal advice on your lease contract and talk to your landlord about rent abatement and what they may do to help.
Local Assistance - There are economic stimulus and consulting companies that help businesses navigate their growth during positive economic times. These same groups are in tune with local, state and federal government stimuluses and changes happening before the public will catch wind. In addition, they are connected well with other business owners in your areas that allow for sharing of ideas, shareable workforce and unemployment navigation. Financial Plan - One of the first calls should be to your financial planner, CPA and the team that handles cash-flow analysis and debt financing. Find out how long your cash is good for and what moves you have to make to extend the companies financial plan. You should also talk with your loan officer about extending lines of credit, creating additional funds and a plan to weather the storm.
GRVC is still looking to help
Yesterday when I started this blog, I thought to myself, "it is going to be difficult to find a business to buy/invest in right now." Although this is true on our end, because of the uncertainty of the length of business interruption, I realized now could be a time where businesses need some help more than ever. That could mean a controlling acquisition to inject capital in the business to help employees and get through this or just consulting from someone in the same boat as them. Alternatively, this could be the final straw for someone looking to retire and make sure their future is somewhat in tact. At minimum, I think as West Michigan business owners, it would behoove us to collaborate and work together to share as much information as possible. If you have a small distribution, technology or manufacturing company (plastic-injection molding preferred) company, or any small business, and would like to talk, share plans and ideas, feel free to shoot me an email at firstname.lastname@example.org.
This is scary times for everyone but I am more confident than ever, we will get through this together, and be wiser because of it. Remember that West Michigan is a tight-knit community that always bands together in times like this, and this will be no different. Stay inside, talk on the phone, read a book, learn a language, pray, and most importantly; stay positive. Coronavirus has nothing on us.