If your business is like everyone else’s, you’re struggling with the challenges of complying with social distancing requirements while also figuring out how to keep your company solvent. The biggest thing that makes this situation difficult is the uncertainty. Nobody knows when the crisis will be over.
At Bancroft Group, we believe:
Re-emergence will be gradual; it will not be an immediate process.
Recovery will be choppy, with fits and starts. Some parts of the country may need to shut down again—even more than once—while others stay open. Some industries will open faster than others. Some will suffer unforeseen setbacks.
The US will take significant time to get back to the pre-COVID normal. True normalcy may not be achieved until most of the population is vaccinated and/or has herd immunity. That means the timeline for complete recovery could be measured in years, not weeks or months.
This is a significant opportunity for strong players to increase their share of the market.
Leading your business through so much uncertainty is difficult. As hard as it was to take your business from 60 mph to zero, you need to prepare for taking it from zero to 60.
This is essential preparation. The post-COVID environment will favor those who are ready to move swiftly, decisively, and with force. Here are five questions CEOs and Boards should answer now to prepare for pandemic emergence:
What are our people plans?
Where does our leadership team fall short for a post-COVID world? If you need to make changes or bring in the help of additional experts, now is the time to do it.
How do we retain our team through the shutdown? Perhaps reduce benefits or start a part-time schedule? If they’re on the job, address safety and training issues. Create an on-going engagement strategy for furloughed workers.
Evaluate whether you need to reduce costs through RIFs or furloughs.
Identify and take action to address areas of organizational weakness
How are we helping our patients/customers navigate COVID-19? Ensure that they know how to stay in contact and that you continue to support them through the crisis. How can we give them value during this critical time?
What should our survival mode operations and cost structure look like? Get a picture of your financial situation and plan how you will pay the bills.
How can we take advantage of executive bandwidth freed up by COVID-19 to strengthen our organization? What key improvements can you invest in to enhance the business?
Technology upgrades. Maybe now is the time to install a new computer system or buy a new piece of equipment.
Facility refurbishments or office moves. If your current facility isn’t meeting your needs, consider renovations or relocating. There won’t be a lot of competition for these services and it won’t disrupt your business.
Recruit talent from competitors. Other businesses may be laying off or furloughing their employees. You can acquire top talent.
What do we need to do now with capital and governance issues?
Communicate, communicate, communicate! All your key capital and governance stakeholders will be under pressure. Strong teams should provide clarity on actions being taken, plans being developed, and views on the market.
What’s your status with your lenders? Do you need covenant relief? Payment relief?
Managing your board. Are there governance or organizational issues you haven’t had time to address before?
Liquidity and leverage. Nobody knows what the future holds. Be sure you have enough liquidity to act quickly if necessary. The market is volatile and if a good opportunity comes alone, you don’t want essential assets to be tied up. Be prepared to pivot in any direction.
At the Bancroft Group, we’ve been helping private equity investors for decades. Reach out today; we’re happy to discuss how we can help you handle today’s challenges and plan for the future.