10 Key Areas of Focus for the Next 90 Days

1. Make sure your people are safe:

  • Establish communication lines / talk to each one regularly.

  • You are nothing without your team.

  • Policies on safe operating procedures – educate people – communicate and make sure we are following these. Employee rules / subcontractor rules - be clear.

  • Keeping same teams together on the same shift to reduce the chance of team members spreading the virus to your whole team.

  • Make sure you know and follow your client’s policies as well.

  • If your facilities are still open, maintain new levels of cleaning /distancing

2. Get in touch with clients - find out how they are doing / assess the COVID-19 impact on them:

  • Establish a risk assessment for each client and policy on terms/collections.

  • Know what terms, discounts, revenue deferrals you are willing to extend to each customer/customer group.

  • Actively manage receivables - get clear promises from clients as you can.

  • Look for new opportunities to serve your clients differently - listen for their pain points and adjust.

3. Get really good at doing business virtually/remotely if you are able:

  • Make sure people have what they need to do their jobs remotely.

  • Establish how phones, mail, deliveries will work remotely.

  • Review critical job functions/systems and how they will work remotely (business continuity)

  • Get good at remote meetings fast.

  • Virtual situation room / virtual dashboards - visibility - make the numbers visible to your now remote workforce.

  • Use technology as much as you can to stay connected and as efficient as possible.

  • Use brainstorming techniques to find solutions to new problems fast - engage your people and let them help you find solutions quickly.

4. Establish your virtual communication rhythms:

  • Communicate relentlessly

  • Daily all-hands meeting / company gathering.

  • Daily huddles – cascading information up the organization to share what's going on.

  • Adjust your weekly meetings as needed to manage the new remote needs of the company.

  • 1-on-1 coaching - get time with the people that report to you.

5. Establish a COVID-19 Task force:

  • Monitor changes that are happening quickly: Govt (local, state, federal), Client, Industry/Market, Employee, Key Suppliers/Partners, Economy.

  • Monitor feedback coming from your staff - make sure they are communicating what they are seeing and hearing from the front lines.

  • Make good quick decisions.

  • Communicate with your team daily and more often as needed.

6. Cut out unnecessary expenses/projects to conserve cash if you see challenges coming in 2020:

  • Play defense first.

  • Identify discretionary expenses and make decisions (marketing is not a discretionary expense, nor is IT Support).

  • Remove C players (bad culture fits, bad performers) from your team as soon as practical. Consider how to approach further staff cost reductions if needed.

  • Put capital projects/ improvements on hold if possible.

7. Contact holders of your liabilities / key suppliers - negotiate payment terms:

  • Boldly confront the debt situations that scare you and contact your creditors. Ask for help as needed. Banks and credit card companies know what’s going on - talk to them.

  • See if key suppliers are able to give you more flexible terms/discounts/revenue deferrals.

  • Ask for what you need - don't ask for more than you need. Be a good citizen.

8. Rolling 90 day plan - key metrics and priorities - keep the team focused:

  • Forecast P&L and Cash flow - use a 3 scenerio approach - best, worst, likely.

  • If cash gets tight, do cash flow forecasting weekly or even daily if needed.

  • Leading indicators - identify the metrics that will give you insights on where you are going.

  • Make sure your team knows the new targets and is working with you to achieve them.

  • Supply chain – will we have availability of materials / products?

  • Get clear on your 90 day priorities for the company and by department. Stay focused.

9. Apply for government assistance wherever you can if needed - federal, state, local:

  • Try to keep up with federal and state programs being put in place rapidly to help businesses and employees who are struggling.

  • Determine what your situation makes you eligible for and apply quickly for the help you need. Governments move more slowly than we need so get in line early.

10. Scenario planning for 2020 - revenue, expenses. cash flow:

  • Start doing revised 2020 thinking in a few weeks when we know more.

  • 3 different scenarios - optimistic, pessimistic, realistic (super green, red, green).

  • State and note your assumptions clearly for each scenario:

    • How long will we be sheltering in place? What impact will this have? Watch what is going on in China - they are ahead of us in this crisis by 60 days.

    • How much revenue impact will we experience?

  • If you are able, look for opportunities - new revenue, acquisitions, finding good people will be possible.

10. Scenario planning for 2020 - revenue and expenses:

  • Start doing revised 2020 thinking in a few weeks when we know more.

  • 3 different scenarios - optimistic, pessimistic, realistic (super green, red, green).

  • State and note your assumptions clearly for each scenario:

    • How long will we be sheltering in place? What impact will this have? Watch what is going on in China - they are ahead of us in this crisis by 60 days.

    • How much revenue impact will we experience?

  • If you are able, look for opportunities - new revenue, acquisitions, finding good people will be possible.

8. Rolling 90 day plan - key metrics and priorities - keep the team focused

  • Forecast P&L and Cash flow - use a 3 scenerio approach - best, worst, likely.

  • If cash gets tight, do cash flow forecasting weekly or even daily if needed.

  • Leading indicators - identify the metrics that will give you insights on where you are going.

  • Make sure your team knows the new targets and is working with you to achieve them.

  • Supply chain – will we have availability of materials / products?

  • Get clear on your 90 day priorities for the company and by department. Stay focused.

7. Contact holders of your liabilities / key suppliers - negotiate payment terms, deferrals, and discounts

  • Boldly confront the debt situations that scare you and contact your creditors. Ask for help as needed. Banks and credit card companies know what’s going on - talk to them.

  • See if key suppliers are able to give you more flexible terms/discounts/revenue deferrals.

  • Ask for what you need - don't ask for more than you need. Be a good citizen.

  • If you have cash, negotiate discounts. Some suppliers will be willing to trade value for cash.

6. Cut out unnecessary expenses/projects to conserve cash if you see challenges coming in 2020:

  • Play defense first.

  • Identify discretionary expenses and make decisions (marketing is not a discretionary expense, nor is IT Support).

  • Remove C players (bad culture fits, bad performers) from your team as soon as practical. Consider how to approach further staff cost reductions if needed.

  • Put capital projects/ improvements on hold if possible.

3. Get really good at doing business virtually/remotely if you are able

  • Make sure people have what they need to do their jobs remotely.

  • Establish how phones, mail, deliveries will work remotely.

  • Review critical job functions/systems and how they will work remotely (business continuity)

  • Get good at remote meetings fast.

  • Virtual situation room / virtual dashboards - visibility - make the numbers visible to your now remote workforce.

  • Use technology as much as you can to stay connected and as efficient as possible.

  • Use brainstorming techniques to find solutions to new problems fast - engage your people and let them help you find solutions quickly.

2. Get in touch with clients - find out how they are doing / assess the COVID-19 impact on them:

  • Establish a risk assessment for each client and policy on terms/collections.

  • Know what terms, discounts, revenue deferrals you are willing to extend to each customer/customer group.

  • Actively manage receivables - get clear promises from clients as you can.

  • Look for new opportunities to serve your clients differently - listen for their pain points and adjust.

1. Make sure your people are safe

  • Establish communication lines / talk to each one regularly.

  • You are nothing without your team.

  • Policies on safe operating procedures – educate people – communicate and make sure we are following these. Employee rules / subcontractor rules - be clear.

  • Keeping same teams together on the same shift to reduce the chance of team members spreading the virus to your whole team.

  • Make sure you know and follow your client’s policies as well.

  • If your facilities are still open, maintain new levels of cleaning /distancing

Cash / Banks / Credit Cards/ Financing

  • Build cash flow projections if you don’t already have them.  Basic weekly projections of cash-in and cash-out can help you spot shortages well in advance. 

  • Always know how many months of cash you have remaining.  Some teams are calling this their "Time To Death" - its harsh but keeps people focused on the number (from Metronome United Coaches discussion - 3/17/2020)

  • If you are profitable, you can have a monthly cash flow forecast.  If you are not profitable, better to have a weekly cash flow forecast (3 week rolling at a minimum).  If things are really bad, you need a daily cash flow forecast.

  • Metronome Coach Beth Fisher shared the following Cash Forecasting practices (Metronome Growth Coaches webinar 3/17/2020):

    • Weekly cash forecast - 3 months out

    • A/R, A/P subledgers - P/R

    • When can you collect.

    • Keep it super simple - high level.

    • Get your cash balance every day from bank - what's cleared?

    • Reconcile to your bank account weekly.

  • Manage your receivables actively.  Companies are likely to slow their payment processes down to conserve cash.  Keep in touch with clients about their payable plans.

  • Consider maxing out your lines-of-credit and sit on the cash.  Banks may pair back credit lines that aren’t being used to reduce their risk.  Use your line if you are concerned about getting it cut.

  • Know your loan covenants and make sure you are and will be keeping them above your bank’s requirements.  You don’t want your loan pulled unexpectedly.

  • Keep communicating with your bank and keep your relationships with your loan officer healthy.  Give them advance warnings on possible trouble spots so they are more likely to work with you. Banks don’t like surprises.  If you are on your numbers and keep them in the loop well in advance on future trouble, they are more likely to work with you in an adverse situation.

  • Put expansion plans on hold and conserve cash.

Review your liabilities / creditors

  • Confront the things that are scaring you head on.  Initiate conversations with each to open up a line of communication and a plan to get through the crisis together. 

    • Negotiate grace periods.  Everyone knows there's a big problems out there - banks don't want to own your collateral - they seem so far willing to work with companies. 

    • Be vulnerable - talk to them and share your projections and find out what's possible for you.  Have the courage to tell them how bad it is for you.

    • Ask for the moon - ask for anything - go now before you are desperate

    • Demand will get really high - be the first before others grab up the best opportunities

Quicker you react - better you will end up

Vendors - could give 90-120 days

This will give you the liquidity you need to survive.

(from GGOB Webinar with Jack Stack on 3/20/2020)

Get your cash flow statements up in your virtual situation room

  • Show people where things are

  • Get their thinking about course corrections to make things better

(from GGOB Webinar with Jack Stack on 3/20/2020)

Credit Card Companies

  • I am hearing reports of credit card companies not only backing off their policies of interest charges and late fees, but actually offering to help their clients thru the crisis.  Contact your credit card providers and ask them what their policies have become for the next 60-90 days. 

Lines of Credit

  • Having a line of credit doesn't help you if you make bad cash decisions - keep the cash in your account for as long as you can.  Save it for when you really need it. Cutting spending is key. (from TruMethods Winner Circle webinar - 3/20/2020).

 

Federal / State / Insurance Company Help / Aid

Unless you are the rare company that has opportunity to grow in this crisis, prepare to shrink and ask for help before you need it. There are several federal web sites that are taking applications from businesses who are being impacted:

Federal

○ SBA Economic Injury Disaster Loans (EIDL) -SBA Economic Injury DIsaster Loans (EIDL) Saw this note on LinkedIn from Michael Herrick - the SBA Disaster Loan web site is broken in the Chrome browser. You will be unable to e-sign the tax transcript authorization. Firefox should work.

○ Keeping Workers Paid and Employed Act - Keeping Workers Paid and Employed Act •

States - this is all I have now - if your state offers programs that are helping share them in the comments below:

  • Check your state web sites to learn as much as you can about aid that is becoming available.

  • CA - EDD Work Sharing Program - allows workforce to work will people collect unemployment. Fill out PDF - send it in. CA Work Sharing Program

  • CA COVID-19 Resources: CA Corona Virus Aid

Business Interruption Insurance

• Read your insurance policies to see if you have any business interruption insurance that could be triggered by government mandated shut downs or COVID-19 issues. Your insurance company will not tell you voluntarily that you are covered – you need to initiate claims with them based on your policies. Read the fine print and see if you have any relevant coverage.



Families First Coronavirus Response Act

Governments are passing legislation rapidly and getting a handle on the new rules will be daunting.  More challenging, while trying to model future revenues and corresponding costs, the cost rules may be changing so we better know as much as possible what we need to take into consideration.

US:

Disclaimer - I am not an attorney and not able to advise on legal issues at the federal, state or local levels.  I am including this notice here just to make US employers aware of new legislation that they need to get familiar with somewhat quickly.

The Federal government passed on Friday, 3/18, the Families First Coronavirus Response Act.  In trying to make sense of this, I've looked at a few articles and there are discrepancies between them so I don't have clarity yet on what it all means.  As far as I can tell, it goes into effect on or around 4/2/2020 (15 days from the date signed) and expire on 12/31/2020.  These rules apply to companies under 500 employees.  If you are under 50 employees, you can apply for an exemption, but will be subject to the provisions until you get the exemption.  Here are key points as I understand them:

  • The Act requires employers to provide emergency paid sick leave of 10 business days of emergency paid sick leave to all employees up to a maximum of $511 per day for the following COVID-19:

    • Directed to quarantine by the federal, state, or local government.

    • Told by a health care provider to self-quarantine

    • Employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis (self-quarantining).

    • Employee is caring for an individual who is quarantining under the 3 provisions above.

    • Employee is caring for a child who's school is closed or the day-care provider is closed or quarantining.

    • Employee is experiencing symptoms of COVID-19.

    • Employer may not require employee to use other paid time off before providing emergency sick leave.

    • Employers do not need to pay the employer FICA on these wages.

  • Expansions of the Federal and Medical Leave Act (FMLA) - an employee may take up to 12 weeks off of job protected leave under 2 conditions:

    • They are caring for someone with COVID-19, 

    • They are caring for a child who's school is closed due to COVID-19.

    • Employer does not need to pay for the first 10 days or require employee to use earned sick, vacation, etc. time. 

    • After 10 days, the employer must pay the employee 2/3s of their regular rate of pay up to $200/day, or $10,000 total. 

    • The Act grants a Tax Credit to cover the emergency sick leave and FMLA leave based on what was actually paid to the employee.  The Tax Credit will apply against the Employer FICA expense.

    • Employers do not need to pay the employer FICA on these wages.

Here's an article that gets into more details - there are many others - read and search for information on this important legislation. If you find any inaccuraries or additions you believe I need to make to the information above, please leave it in your comments.:

Family First Corona Virus Response Act