1. Hoard Cash (cash is KING to survive!)
- Aggressively collect A/R
- Draw lines of credit (better safe than sorry and the interest isn’t that much!)
- Slow roll A/P
- Ask your banker, landlord, etc for a 3 to 4 month deferment on rent, loan payments due to COVID19.
2. Develop a proactive four tier cost cutting plan and implement it immediately when the pre-established triggers are met. In Rock the Recession, we call this the Emergency Brake and our best thoughts on how to implement one are in the book and workbook. Let us know if you need a copy. Hope is not a strategy!
- Use this time to deal with problem people you have put off dealing with because times were good.
3. In 6-12 months, we are fully expecting ambulance chasers to put up billboards to advertise helping people who got COVID19 sue their companies. We want you to develop a communication plan detailing what you have done to protect your people in the field and in the office and have them acknowledge that they read it, got it and document their acknowledgement of same. Consider using Ving which is perfect for compliance communication. I have cc’d the CEO of Ving if you want to follow up with Tony directly (by way of full disclosure, both Paul and Jonathan are shareholders of Ving because they believe so strongly in its utility for situations just like this).
4. Notify all vendors and customers with whom you have contracts (owners or general contractors or subs, if you’re a contractor) that you are or may be impacted by COVID19 to set the stage for schedule extensions and change orders to existing contracts.
- CREATE cost codes to capture all costs and productivity impacts related to COVID19 in the field and the office. These costs may, in the future, be covered under your business interruption policies. It’s very possible Congress could legislate that COVID19 is an insurable matter. Better to document and track costs now.
5. Go to Aon.com/coronavirus for great materials to help you with risk mitigation.
6. Get in line with your banker to apply for the CARES Act loans (grants) but DO NOT count on seeing a check for two to four months. Your banker can guide you to the right loan program for your company. Attached is a handy calculator (thanks Gunner!) for the CARES Act. CLICK HERE TO DOWNLOAD CALCULATOR
7. Have your CPA firm advise you regarding any tax planning opportunities arising from the CARES Act.
8. If you have a strong balance sheet, prepare to POUNCE! Look to buy talent, cheap acquisitions, etc. Use this time to INNOVATE – develop new products and solutions. Also, use this time to digitize and streamline your work processes and train your people.
9. Plan for COVID19 to disrupt the economy for 9 to 12 months. Plan for the worst and hope for the best. If we’re wrong, we’ll be happy to apologize that we acted like Chicken Little (but we don’t think we’re wrong…)
10. Stay Positive – this too shall pass! You need to focus on surviving to fight another day. Be strong for your people and remember that they are scared and need guidance and support. It’s a great time to be a leader!