By Eric Woodruff, CPA, CCIFP
Partner, Audit & Assurance Services
When the New Year’s Eve ball dropped in Times Square, business owners’ minds probably flooded with a vision for a very prosperous 2020. Little did they know that the streets of New York and cities across the country would be barren just a few months later due to a pandemic.
The COVID-19 outbreak has wreaked havoc on all businesses — large, small, domestic and international. There has been no place to hide! Now, the businesses still standing — especially smaller businesses — are in survival mode, doing whatever they can to maintain the financial wherewithal needed to keep running.
Before you start crunching the numbers, you need to adjust your expectations and redefine success. Maybe success in the current climate means maintaining 75 percent of your customer base. Or it could mean increasing online sales. Perhaps it means the development of a new product or service. Adapting and evolving will put your company in the right position for a comeback. For some, the innovation of American enterprises has been challenged, and they are answering the call.
Obviously, you’ll need to adjust your annual budget. This involves modifying your cash flow planning, which may require additional dialogue with your bank, shareholders and other stakeholders. You might need to set up more lenient payment plans with vendors and clients. Times are tight; they will understand. The common saying at the present time is, “We are all in this together,” but some are looking in their boat and they are the only ones rowing!
Unfortunately, you must make difficult decisions now in order for your business or organization to survive for long-term success. Under the current circumstances, the unthinkable is now reasonable. We’re talking about making significant budget cuts, furloughing employees and shrinking your service hours or offerings to make it economically feasible to operate. You must plan and act as if this disruption will last longer than we hope, and pray that the duration is much briefer.
As you’re making these difficult sacrifices, remember the adage, “This too shall pass.” Hardship and failure are part of the journey toward success. Hang in there! You’ll be glad you did in the long haul. Many believe that the lessons learned and experienced in these turbulent times will make you a better manager and your team stronger!