This interview was also featured on Maryland Department of Commerce’s blog on September 22nd, 2020.
The Maryland Department of Commerce sat down with Ellin & Tucker director Bryan Porter, CPA, MS to discuss the current status of today’s market during the COVID-19 pandemic and tips for businesses trying to work through current challenges while preparing for the future.
While reopenings continue across the state, many businesses have altered their usual routines to adapt to COVID-19 regulations. Should businesses re-think their normal operations after the pandemic has ended?
Absolutely. We always advise business owners to use every bit of available information to make the best possible decisions for their company, employees, and customers. This pandemic is a roller coaster ride and there’s no getting off until the virus is defeated. While we are hopeful for a return to normalcy, we are doing a lot of work to help prepare businesses in pivoting their strategies for whatever may come. Right now, my best advice for business owners and executive teams is to trust your pre-pandemic operating plan and continue to work toward your strategic goals.
There is a big difference between altering the plan based on new information about the pandemic and being so consumed with reactionary efforts during day-to-day fire drills. The latter approach can force a loss in seeing the overarching strategic vision. All businesses will have challenges and opportunities because of the pandemic, but keep your original vision in mind as you make decisions to guide the future.
What should businesses be aware of when seeking out grants, loans, and tax incentives to ease the impact of the pandemic?
It’s critical to fully understand the terms, subsequent reporting requirements, and any potential restrictions of the programs your business is considering. A qualified attorney or CPA, who is familiar with the specifics of your business and strategic vision, can help explain the programs and determine which one(s) may be the best fit for you, as well as how to apply them to your business. After that’s been decided, turn your attention and wisdom to what’s next. Because these programs are intended to provide short-term assistance, it’s up to businesses to make necessary changes to survive and be successful over the long term. Don’t let these programs stop you from making necessary and difficult decisions. Instead, leverage them to work for you as a means to fuel your business’s health, stability, and vision forward.
While the future for 2020 is uncertain, what are a few actions local businesses can take to stay open and profitable?
From a financial perspective, projecting future cash flow has never been more difficult or more important. Both owners and banks invested in the business want to know if it can remain profitable. A proper cash flow projection model cannot be 100 percent accurate in the current economic environment, but will show business owners trends they need to address. The exercise may also show opportunities to help supplement cash flow while your core business recovers. Revisiting the model on a very regular basis is the best way to spot the positive or negative trends. While it may not be feasible for all, many business owners are updating this information on a daily basis.
What steps can businesses take to be prepared for a potential similar situation in the future?
Every tragic event in the past has had a distinct impact on specific businesses, so the reality is that there’s no one way to prepare. That said, businesses that have a rainy day fund, access to capital from ownership or a financial institution, and maintain a manageable amount of debt, will be in the best position if a catastrophe strikes again. And as mentioned before, a strategic plan is also helpful to provide a road map to meet your goals. During times of turmoil, the plan can help businesses refocus on what’s important to them, while making sure required situational adjustments help them stay as on track as possible. Finally, having the right team in place and making sure each person understands their roles and responsibilities is extremely helpful in times of crisis. While this is important for the business’s internal management team, it is equally important for your external advisors.
What advice do you have for startups and entrepreneurs who planned to launch in 2020?
My advice would be the same as it would be for an established business. Evaluate your existing strategy in the context of today’s economy, carefully adjust as needed, don’t lose sight of your long-term goals, and then push forward with your plan. There is no question that the events of 2020 have made it extremely difficult to launch and market new ideas. In some ways, 2020 may have leveled the playing field for those with well thought out business ventures. Because of the pandemic’s impact, businesses should adopt the same kind of ingenuity, energy, and innovation that it takes to get a business off the ground. It’s something that all businesses need to do so they can adapt their overall plan and succeed in tomorrow’s marketplace. Like many other times in history, significant challenges and tragedy leave room for new opportunities, new ideas, and even new businesses. Burgeoning businesses and entrepreneurs are often more nimble and can react more quickly than established businesses to meet that call.