Quote:
Originally Posted by mililo4cpa
Do you mind if I ask what type of goods you buy / sell / distribute? OK if answer is no....
Also, in an earlier thread, I mentioned that I'm a small business consultant, and we have laid out plans with each of our clients to protect three things: people, integrity of your business, and liquidity. Sounds like, from your post, that you've done a great job in all those aspects.
Along with those items, I've been telling my client that the single most important aspect of this is the owner being the leader. As scared / concerned as you may be, I guarantee your people are much worse. It's good that you are taking care of them, and leading by example here, because that will have a calming effect on them. But make sure you have specific actions for each of the three areas, and execute, execute, execute every day. This will also calm your people (knowing there are plans).
With all that said: Make sure you review your plans periodically. If liquidity starts becoming an issue, then you have to be real about the situation. Call your banks defer notes, mortgages, or revert to interest only for next 3 months. Call your health care broker, defer premium payments. Keep an eye on Family First Act regarding your people v. UI (may be better to lay off sooner rather than later - as much as nobody wants to do that). Get into the SBA application process, even if today you don't want or think you need the funds....you don't have to take funds even if approve, but leave yourself the options. Also now that CARES has been signed, inquire through your bank about those funds. Be prepared!
And finally, let's figure out how to "raise the bridge"...My general feeling is that most business owners are taking same approach to selling or haven't adapted to the "new reality" we are going through....often time just waiting for phone to ring or customers to place orders that may not even know you're open for business. May not be you by any means, just what I'm seeing (hence the question of what do you sell...."
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We distribute about fifty brands of automotive specialty tools and parts. Retail and wholesale.
Wednesday 3/18 we had a company staff meeting where we had a candid talk and I asked for their input on the situation. I let them know that I've got their back through this and they let me know they've got mine. Each day we've been implementing new procedures or rolling out our scheduling/worksite changes.
There are three employees in charge of updating me as new applicable laws or developments happen. Our CPA firm, county development, and regional small business administration director have all been in constant contact with me. Not only do I have good relationships with the last two but we're pretty important to this community because we're in a very poor, rural area and we have one of the larger payrolls around.
Having a plan calms me. Just last night we started developing a plan for when someone in our main building is inevitably exposed. Part of that plan will be to have Service Master or similar come in and sanitize after we all quarantine. Then the six employees at the remote site could come back and pick, pack, and ship the physical goods. There are a few of us who could assist with customer service from home then as well. We could get by for a few weeks in that scenario but those six would probably be exhausted.
Our inventory valuation (our cost) to debt ratio is greater than 4:1 so I feel like we're in good shape. What reports/measurables do you suggest I keep an eye on right now? Payroll is by far our greatest expense and obviously there's a quick solution to that if I absolutely had to but I am fighting like hell to avoid that.
Our web page header says "Essential Business: We're Still Shipping Orders". The issue right now is that repair shops make up over half of our business and some are temporarily closing.
Several weeks ago I locked in a low rate to refinance our personal home mortgage. That process is still under way. I'm afraid to apply for any of the government loan stuff right now because I don't want it to screw with my refi and I feel like we won't need the business loans. I could end up being wrong about that though, who knows.
I'm mentally exhausted and haven't slept much in a couple weeks. That's making it tougher to be confident in my decisions. I feel like we've got a better handle on everything now though so perhaps I can start sleeping better. As a matter of fact I got seven hours last night and feel great today!
Thank you very, very much for the input and feedback.