“Whether or not our businesses survive is going to be up to our response to the problem as leaders. It won’t be easy, but this, too, shall eventually pass.”
As I write this, the COVID-19 virus is making its way through the country probably more quickly than we realize. Businesses of all types are reeling, with many being closed completely right now. Ohio just announced they are closing all bars and restaurants. Schools are closed. Universities have ended class gatherings and are moving online. And A/E firms are still trying to function with most or all people working from home and projects going on hold daily. Not to mention the fact that the illness and death projections are beyond scary, with us older folks being particularly vulnerable to and affected by the disease. It’s a bad time – and not just here. It is happening worldwide.
So what will YOU be doing about it? As bad as it is, this virus could actually force us to make some real changes in how we do things. We travel too much, we have too many meetings, we need to do a better job managing remote workers – many of the ways we do things just aren’t very efficient. The important thing is to not wait too long to start! The sooner you act the longer you will be able to survive a downturn. And it could be a pretty big one – at least for a while.
We can all make it through this. While every company’s financial situation is different, here are some things I would advise every company owner to do:
- No firm will be able to achieve its long-term potential without first surviving. This message has to be communicated to all employees. Whatever you do as leaders you are now going to have to communicate more with your people than you ever have before. A daily email from the CEO on the firm’s financial status and actions being taken to deal with the coronavirus situation may well be in order. People are fearful. Information will help alleviate fears.
- Let everyone work from home who can possibly do so. They will feel better about their situations if they can work from home and help take care of their families, and not potentially expose themselves and their families to the virus. Don’t insist on people coming in when it is not absolutely essential for them to do so.
- Talk to your clients. Find out what their plans are. Communicate your desire to work with them and help them, as well as let them know you are dependent on the work you get from them. Find out what their cash situations are, what their ability is, and if they will be to pay their bills from you so you can plan accordingly.
- Cut all unnecessary overhead expenses. Now is a time for austerity so we can survive. Food in the kitchen. Lights that don’t need to be left on. Renewals on service contracts. Unnecessary software. I can’t imagine what all these expenses are in your firm, but whatever you can cut, dump it now.
- Consider across-the-board pay cuts. But make a promise to pay back the cut the next month based on your cash profits IF you have any. I am not usually a fan of across-the-board cuts, but now is not a normal time. Having a job that pays you something is going to be better than no job. And let’s face it, all of our personal expenses are likely to go down if we are stuck in our homes, so now is when people can best afford to take these cuts.
- Talk to your bank. Get the largest line of credit you can get. If you are worried about your ability to meet any covenants such as a clean up clause or debt to equity ratios, tell them now. If you are worried about your ability to repay any amortizing loans tell them so. Get any commitments you can get from them for leniency in the future now.
- Look into SBA emergency loans. There is a $50 billion emergency loan program from the SBA for small businesses affected by the coronavirus. It is being administered differently based on where you are. Here locally in Fayetteville, Arkansas, our mayor’s office is involved. Figure out what is happening in your area and learn how you can get on the list to receive some of this money now before it’s all gone.
- Talk with your competitors and peer firms. Establish a local group with the CEOs of other companies in this business to share information and ideas on how to respond to the current situation. It is critical we all share best practices and what our responses are to this problem if we are to come out of it with our businesses and capabilities intact.
We will all suffer with the current situation. But whether or not our businesses survive is going to be up to our response to the problem as leaders. It won’t be easy, but this, too, shall eventually pass. When it finally does, I would bet the collective euphoria will be so great that the demand for what we do will be incredible. So hunker down and hang tight in the meantime.
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.
Zweig Group has launched a survey to see how AEC firms are reacting to challenges presented by the coronavirus (COVID-19). It’s a very short questionnaire that should take no more than 10-15 minutes. Participants will receive a free report of this survey’s findings as well as a $100 discount on any Zweig Group research publication.