Now is the Time for Focus
As of late April 2020, there is one thought at the forefront of the vast majority of businesses around the globe, namely, what steps do I need to take to stay in business until the COVID-19 pandemic is over or recedes? There is no doubt about it, this is the “big question” of the day.
The global economic structure hasn’t seen this much uncertainty since WWII, and some would argue that we’ve never seen this level of simultaneous global economic disruption. Knowing what steps you need to take to keep your business up and running is of paramount importance.
In short, business owners must be sure that their businesses are in good shape. You should take every step possible to position yourself for when the economy is back up and running at full steam. Right now, there is a degree of chaos and uncertainty, but this will not last. As a business owner, you need to focus on getting your house in order.
Now is not a time to take a vacation. Instead, you should be focused like never before on the inner workings of your business. You should be striving to find ways to improve every single aspect. Of course, this is easier said than done. There is a real psychological hurdle, as for many people it seems as though everything has “stopped.” While customers, clients, and staff interactions have been dramatically reduced, now is not the time for you to “check out” mentally and wait for things to get better.
Rarely, if ever, has it been more important for owners to invest as much of their time and energy as possible. After all, as a business owner, you have already shown a great deal of drive and determination, as well as at least some level of out of the box thinking. You have proven that you have what it takes to get through the recent challenges.
Many will feel dejected right now. But you should pool on the same skill sets that allowed you to create a successful business in the first place. What obstacles did you overcome in life to create your business? Was your business created during a prior economic downturn? The odds are that you already have skill sets and strengths that will allow you to survive the fallout of COVID-19.
For business owners who truly want to survive the economic stress of the pandemic, ultimately, focus is key to survival. The odds are excellent that there are revenue streams and different approaches that may have been overlooked. Your job is to identify and then exploit those avenues.
Copyright: Business Brokerage Press, Inc.
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Questions for Helping Businesses Survive the COVID
Developing Your 90-Day Plan
Those who want to make sure their businesses survive this pandemic will want to achieve a laser-like focus. It is important to realize that the forced downtime triggered by the pandemic affords you the opportunity to work on potentially neglected aspects of your business.
Summed up another way, now is the time for dynamic and focused action. In this article, we’ll address what you can do to help your business survive this unusual time period.
Reevaluating Your Business
It’s time to step back and look at every aspect of your business, including your processes. You should be encouraged to find new ways of doing things. In short, now should be viewed as a time of opportunity to reboot your business. That way when the pandemic has subsided, and your business picks up once more, it is more efficient, more effective, and more competitive.
Scott Bushkie, Founder and President of Cornerstone Business Services, recommended that business owners create 90-day plans where they look for ways to innovate. This strategic plan should focus on what they are going to do and what they want to accomplish. It is critical that there is an actual plan that achieves tangible results and not simply a list of things that should be accomplished. Listed below are a few questions you should be pondering.
- How can I outperform the competition?
- How can I innovate?
- How can I increase my use of technology?
- How can I deliver my products and services in a different way?
- How can I reduce my operational costs?
- Have I reached out to my suppliers and creditors for assistance?
- Have I applied to applicable SBA COVID-19 focused programs?
- What do I want to accomplish in the next 90-days?
It’s Time to Reboot
The main point is that businesses should not look at this pandemic situation as some sort of “miserable and stressful vacation,” but instead as an opportunity to reboot what is not working, and look for ways to make improvements in every aspect of your business. This process begins by asking the right questions and striving to find the answers.
In answering these questions and finding ways to help boost your rates of survival, you should turn to every asset at your disposal. Why not ask your management team as well as all of your employees for ideas that could help their business? Everyone should understand that owners are looking for ways to keep their business healthy while navigating the pandemic.
Now is the time for reflection, short-term and long-term planning, and tangible actions. Business owners should also consult with a range of business professionals, including, of course, business brokers and M&A Advisors. Brokers are uniquely positioned to help business owners through this crisis.
Copyright: Business Brokerage Press, Inc.
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Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Columbus CEO entitled “7 things to consider when selling your company” explains seven important things to remember when selling a business according to wealth planners and business owners.
Despite the impact of the Coronavirus, the M&A market has not ceased transactions. The reality is that baby boomers are still considering retirement and 45 percent of business sales are considered opportunistic. This means that it’s important to be prepared for a sale in the event that an offer is made.
Here are 7 things to consider:
- Ask yourself: Am I ready? – Being emotionally ready to walk away from the business is one thing, but the numbers are another. Before you decide it’s time, be sure that the financials align with your post-business owner goals.
- Get help – There are professionals who excel in these areas just like you excel in your business specialty. Use their knowledge and networks to your advantage.
- Be ready for opportunities – The more prepared your business is to sell, even when you aren’t seeking a sale, the more you can capitalize on a deal if one is to be presented to you.
- Get your financial house in order now – You should always be running your business like you’re going to sell it next year, even if you aren’t planning to sell for another five or ten years.
- Plan for your employees – Selling your company impacts your employees, and your employees impact the value and transition of your business. Be sure to plan for both.
- Know your value – Many owners are unclear on the actual value of their company. Get a valuation done so that you are fully aware ahead of time.
- Trust yourself – Bringing in the help of professionals is important, as is doing your due diligence and tracking the numbers. However, you must also follow your instincts since ultimately the final decision falls to you.
Click here to read the full article.
A recent article from The Press-Enterprise entitled “Small business quandary: Should I continue or sell?” provides tips for business owners trying to determine the steps to take during the COVID-19 pandemic.
As a business owner, if you are struggling right now, you are not alone. Despite the pandemic, your business likely still has value. If you can determine where this value is, you may be able to retool and continue on, or you may be able to receive the best potential sale price for your business. The way in which you approach the pandemic will depend on which of the following three categories you fall into:
- Independent Contractor: You may be able to rework your services to be available online. You might consider applying for unemployment under the CARES Act.
- Small Business Owner: If you have a brick-and-mortar location, employees and physical assets, you want to determine your going concern value. This means determining the value of both your tangible and intangible assets combined. If you can continue business while social distancing, develop a plan to do so.
- Entrepreneur: If you’re in this category, you may view this pandemic as an obstacle to overcome since your whole career is based on finding a need and filling the void.
Regardless of what category you fall into, don’t make any decisions based on emotion and utilize the help of trusted professionals.
Click here to read the full article.
A recent article from Security Sales & Integration entitled “Big Idea of the Month: Your Business Should Always Be for Sale” offers the advice of a business owner who successfully sold their business in alignment with their goals.
Michael Marks attributes many things to his success a business owner. One of his goals from the beginning was to sell his business before January 1st 2020. While he suggests creating a successful, profit-driven organization, his big advice is to always treat your business as if it’s for sale. You don’t necessarily have to seek out buyers but you should always be willing to listen when an offer is made.
Click here to read the full article.
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Around the Web: A Week in Summary
A recent blog post from Exit Strategies Group entitled “Can you sell a distressed business?” explores the factors that impact the salability of a business in distress.
The ability to sell a distressed business is largely dependent on the ability to find a buyer who believes that they have the skillset and resources to turn the business around. In general there are four categories of distress:
- Manageable impact, event driven
- Unmanageable impact, event driven
- Manageable impact, systematic
- Unmanageable impact, systematic
COVID-19 would be considered unmanageable impact, event driven. In this scenario, it is unlikely that a new owner would be able to run a business any better than the current owner. However, under certain circumstances a good business broker would be able to attract a buyer that is able to utilize the businesses’ current resources to stay afloat by offering a different product or service that is currently in high demand.
Click here to read the full article.
A recent article from Forbes entitled “The Good News For Your Business Valuation During Unprecedented Times” explains why the current pandemic is likely to have a smaller impact on your business valuation than you might think.
Business valuations are less likely to be impacted for most businesses for two reasons:
- Recasting The Financials – This practice allows a business broker to adjust the financials to compensate for any expenses or loss of funds that are considered unrelated, unnecessary or unlikely to happen again. A pandemic falls into the last category.
- Forward-Looking Business Valuations – A business broker will assess both the historical performance of the business as well as the future facts of the business. Both play a role in how much a company is worth.
Click here to read the full article.
A recent article from Axial entitled “A Shift in Investment Strategies Post-Coronavirus – COVID-19 Virtual Roundtable” highlights the main talking points in a discussion regarding the current pandemic between nine Axial members.
In this week’s virtual roundtable, experts address topics including new and innovative capital structures, how government stimulus funds are impacting the private capital markets, and what’s happening with transaction dynamics. According to the nine members:
- PPP funding is helpful for businesses that are impacted immediately, and those in the service businesses who need to keep employees on the sidelines. For other types of businesses they may pose some obstacles.
- Permanent Equity rolled out a program called Safe Harbor that offers creative capital solutions to businesses struggling from the pandemic.
- Transactions have slowed but not come to a halt. Many transactions are likely to be on pause until an in-person negotiation is possible.
- Strategic buyers are on the market less, making more room for financial buyers to experience increased deal flow.
Click here to read the full article.
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6 Tips and 90 Days to Protect Your Business
There can be no way around it, Inc. contributor Brian Hamilton’s April 2020 COVID-19 centered article, “6 Actions to Take in the Next 90 Days to Save Your Business,” isn’t pulling any punches. Hamilton, Founder of the Brian Hamilton Foundation, believes that the next 90-days could be make or break days for business owners looking to navigate the choppy waters of the COVID-19 pandemic. His latest Inc. article provides readers with 6 actions they should take now to survive the economic fallout of the COVID-19 pandemic.
Tip #1 Vigorously Control What You Can
Hamilton’s first tip is to “Vigorously control what you can. Vigorously ignore what you can’t control.” As Hamilton points out, you can’t control the economy; instead, you need to focus on what you can control. His view is that there has never been a more important time to focus, “More than ever, you’ll need to go to war with things within your control.” Now is the time to exercise control.
Tip #2 Guard Morale
During tough economic times, employee morale can be a real issue. This brings us to Hamilton’s second point, “guard employee morale.” Significant drops in employee morale can lead to serious problems with your business, which is exactly what you don’t want to see right now. Hamilton notes that you have to be the general that helps his or her troops rise above potential panic.
Tip #3 Preserve Cash
Hamilton’s third tip is to “preserve cash where you can.” He states, “Right now, your motto should be: Live to fight another day.” The pandemic means that you need to keep expenses down and watch every dollar. No one knows what the next few months, or the next couple of years, could have in store.
Tip #4 Be First in Line
“Be first in line,” is Hamilton’s fourth point. Hamilton wisely pushes business owners to be the first in line for government assistance. This is very good advice, as SBA and other funds are likely to be limited.
Tip #5 Get Back to the Basics
Fifth, Hamilton recommends, “Get back to the basics…starting with monomaniacal customer service.” As always, customers, whether existing or new, are the lifeblood of your business. You can’t afford to lose customers now and for this reason, you need to have a laser-like focus on customer service.
Tip #6 Pivot your Product or Service
Hamilton’s sixth tip is to “Pivot your product or service to new conditions.” Small changes to your business can open up new streams of revenue. Even if these streams of revenue are comparatively small, they could mean the difference between sink or swim! Try to step back and look at your business with fresh eyes and strive to find ways to offer something new to your customers. Whatever you offer should be based on your existing goods and services and not require a new, large expenditure.
The COVID-19 pandemic is obviously disruptive, but it won’t last forever. Hamilton’s advice of focusing intensely on the next 90 days is sound advice. You won’t regret looking for ways to safeguard your business for the next 3 months.
Copyright: Business Brokerage Press, Inc.
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