We are so incredibly thankful for the thousands of healthcare workers across the country who are putting themselves at risk every day to care for their patients during this crisis. They have been placed in an incredibly difficult situation on the frontlines with a lack of PPE, ventilators and ICU beds in overrun hospitals as COVID-19 starts to peak in the United States. As the majority of the country has rolled out Shelter at Home orders, we’ve started to see initial good news as evidence that the curve is flattening in some of the hardest-hit cities. But this road will be a long one.
At Compass East, we are staying diligent as we work remotely, but also take inspiration from the healthcare community as we navigate forward in an ever-changing landscape. As work continues on “flattening the curve”, businesses have been working in parallel to “level the dip.” Companies quickly triaged, stabilized with short term loan relief, and now need to begin developing treatment plans as we emerge into “The New Abnormal”. Society will fundamentally change due to Coronavirus and the business community will be no different. While this new reality is certainly jarring, we take solace in the fact that fundamental change also creates significant opportunities to improve our businesses moving forward. Here’s how:
Financial Triage in Review
- Emergency Maneuvers – Overnight the world changed. Business leaders reckoned with extreme change in a short period of time. Through no fault of their own, businesses shuttered, sales pipelines dried up, and companies went into defense mode which cascaded down supply chains. In response, hard decisions had to be made to layoff/furlough workers and significantly cut costs. Companies revised cash forecasts in an effort to extend their runway as far as possible in an uncertain environment.
- Stabilization – Companies did everything they could to stabilize. They negotiated with lenders and landlords to delay payments. The Government passed the CARES Act to provide short-term relief in the form of EIDL and PPP Loans to keep workers on the payroll. As loans slowly start to trickle out, companies on life support hope for some breathing room to figure out what is next.
*Present Day* – Building a Go Forward Plan
- Evaluating Scenarios – Today, many businesses have stabilized and remain in defense mode, but you can’t stay there forever. It’s time to reevaluate everything about your business, people, process, team, sales/marketing, business model and operations. Where do you see your industry going? What are lower priority items that always got pushed to the back burner, but are suddenly now incredibly important? Does your revenue model need to change and become more sticky? Is it time to go remote permanently? The crisis exposed your company’s “pre-existing conditions” which put you at much higher risk during the pandemic. Develop a number of treatment options to address the bad habits and inefficiencies moving forward. Nothing is off the table here as you evaluate all scenarios moving forward.
Navigating Forward The New Abnormal
- Adapting to the New Abnormal – While we might start to see some aspects of the economy start to open back up slowly over time, until we find a vaccine, COVID-19 has likely created a “new abnormal” for the rest of the year. We are all going through one of the biggest social experiments ever on a global scale and technology adoption has sped up significantly. How will your customers permanently and/or temporarily change their behaviors? How fully has your company embraced technology? Do you need to pivot? While you continue to be in cash conservation mode, evaluate your new landscape and commit to a go-forward plan. Be extremely methodical and deliberate in the execution of your plan, but pick one and go.
- Lifestyle Changes – Whichever plan you choose, it should be focused on changing bad habits. How was your business exposed during the crisis? Where are your vulnerabilities? A go-forward plan has to address the true underlying issues that are hampering your business to thrive in a new world. Focus on solving the fundamental bad habits of your business to thrive in the new abnormal.
- Better Company Outcomes – When the stress of immediate and overnight change hit, your team rallied around one another and developed stronger bonds. You were forced to incorporate new technologies into your operational process. You found ways to build culture working remotely and cut office expenses. The crisis creates a true opportunity to fundamentally change the way you do business for the better. Use this time to galvanize your company moving forward as those that embrace change will ultimately come out much stronger.
While it’s incredibly hard to see when you’re in the middle of a crisis, it is time to envision a better version of your business moving forward. Take inspiration from the healthcare workers and triage, and build a plan that adapts to the “new abnormal”.
Know you also can’t do it all on your own. Compass East can create a scalable financial operation for your business and bring financial clarity to your decision making. Let’s move forward together.
John Lanahan
Director Of Financial Strategy
john.lanahan@compasseast.com