The Best-Laid Plans For Deals, Business and Life Often Take a Wrong Turn
You did everything by the book. You prepared your business for the deal of a lifetime. Cleaned up your financials, check. Improved your products, services and processes, check. Readied the management team, attorneys and advisers, check and double-check.
Suddenly a radical change in plans and now you must make your company more COVID-19 resistant for survival. It’s as if you’re at the altar and, not only didn’t the bride show up, but neither did the guests and caterers. And, to make matters worse, you’re stuck with nothing but the bills and uncertainty.
The only certainty in business is uncertainty, and that includes the best-laid plans to ensure that a deal will proceed or close as expected. Transactions don’t come with a money-back guarantee, and it’s never over until the check clears the bank.
COVID-19 has changed everything with devastating speed and destruction including death, illness and disruption that has affected virtually every aspect of everybody’s life, underscored by not knowing what lies ahead for deals, and business in general.
If you were about to put your business up for sale, were in the process of selling, or closing in on a deal that was made in heaven, it’s now most likely to be either on hold or off the table completely.
It’s now time for alternative plans A and B with backup plans C and D at the ready. We just don’t know what we don’t know. The only thing for certain is that every business must be prepared for whatever comes next.
Here is a quick survival checklist.
1. Now more than ever, cash is king. In this new era, you’ll need 12 to 18 months of liquidity to stay afloat with revenues in the comeback mode or, even worse, periodically dead in the water.
2. Count every dollar in your business and make sure money going out is an imperative expense. You must become a great negotiator with your vendors and landlords, convincing them that you have a solid plan to make it, but you may need their help in the form of short-term concessions. Remember, if you never ask, you’ll certainly never get. All they can say is no. There are few vendors who will not be asked to pony up, so get to the front of the line. These providers will simply decide which of the companies they do business with have the best chance of survival and try to accommodate them. This means you’ll need a well-packaged message to deliver effectively and professionally. And, never resort to whining or threatening. Remember, your providers are feeling similar pains and suffering as you are. If you can’t meet a debt obligation, let the creditor know well in advance. Under no circumstances simply pretend there is no problem or just ignore paying an obligation. This will guarantee you’ll go to the bottom of the list of those which will be helped.
3. Although it’s painful for all, you must decide now which employees stay, which go and whether others can be placed on a part-time basis or retained as independent 1099 contractors, which could save you taxes and benefit expenses.
4. All businesses, from the smallest to the largest, must be ready to take advantage of any government programs that become available, such as the recent Payroll Protection Program. With the last iteration of this relief package, those companies that moved with alacrity got the money, while the others had nothing to show for their efforts, except disappointment.
5. If you were preparing to sell your business but were stopped by the COVID-19 debacle, nonetheless, continue to improve your products and service. Also, don’t be afraid to take carefully calculated risks that include unique opportunities that have a high likelihood of success.
If we’re remarkably fortunate, all these precautionary preparations will prove to be unnecessary and what you’ll have to show for your efforts is a leaner and more flexible organization. While the best-laid plans for deals and business don’t always happen as anticipated, at least by COVID-resisting your business, you’ll be ready and set to go again when conditions improve, including another trip to the altar.
Michael Feuer co-founded OfficeMax, and in 16 years as CEO, grew the retailer to sales of $5 billion in 1,000 stores worldwide. Today, as founder and CEO of Max-Ventures, his firm invests in and consults for retail businesses. Feuer serves on numerous boards and is a frequent national speaker and the author of business books “The Benevolent Dictator” and ”Tips from the Top.”
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