Six weeks ago, in mid-February 2020, the world was vastly different. Bright economic prospects in the U.S. for another year of expansion and growth seemed inevitable. Employment had reached record highs, business and consumer confidence were strong, and GDP was forecasted to grow at a healthy 2% for 2020. The expectation was that the roaring 1920s were back!
However, then came COVID-19, which had been lurking in the wings and spread across the world in just six weeks, turning a robust global economy into dust overnight. It has left in its wake thus far more than 2 million infected people and 140,000 dead.
To worsen matters, as of today, mid-April 2020, if you haven’t been living on Mars, maybe you should be. Most U.S. states have ordered businesses to close and citizens to stay at home, work from home, and not go out unless absolutely necessary. Consequently, the U.S. has transitioned from gaining 200,000 jobs per month to losing nearly 23 million in the last few weeks alone. Nothing like this has ever had such a colossal impact on labor since the Great Depression. It feels unreal, or surreal, like a zombie apocalypse movie. Regardless of how many times I try to wake up, I can’t because it’s not a dream. For now, this new reality for CEOs and business owners may not forecast increased sales but instead increased bankruptcies.
Enter the U.S. Government to the rescue. In response to this health-driven crisis, many governments around the world have braced for impact, all hoping to ease the economic crash by injecting trillions of dollars into their respective economies. The U.S. recently passed the $2 Trillion dollar Coronavirus Aid, Relief, and Economic Security Act (CARES) to help fund payrolls and other operating expenses for 2.5 months for small businesses. The hope is to help shore up small businesses until the crisis passes. It sounds scary, and it is.
Best Advice from Rick Andrade, Managing Director at JANAS:
From my experience, the critical performance exercise is creating a detailed CASH FLOW PLAN for the next 6-12 months. Minimizing outflows and using government loan and forgiveness programs to ease the pain. So, if you haven’t taken advantage yet, you better get started ASAP. Many will qualify for relief, but fewer if you don’t act fast. The second is to gather your executive team and external advisors, including your CPA, Attorney, and Banker. Everyone needs to be on the same page and follow your business crisis & continuity plan. This is your moment to shine through as a strong leader with a keen foresight and a keen ability to communicate to your staffers how the company will navigate this existential crisis like no other. There is light at the end of the tunnel.
Article Authored By Rick Andrade
