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Nikoleta Angelova is a Business Consulting Services Director of Transaction Advisory at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.

  1. […] negotiations. In other words, your quarterly forecasting tool, more commonly referred to as a 13-week cash flow model, is based more on expected (versus “known”) inflows and […]

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Get Proactive to Plan Your Business Recovery from COVID-19 Crisis

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Government shutdowns of non-essential businesses, stock market declines stopped only by circuit breakers, restrictions on social gatherings, and the continuous news and uncertainty about the COVID-19 pandemic may make it seem like there’s no future for your business. It’s hard to see past this moment, because we keep hearing that it’s unprecedented. And while it’s true that none of us have lived through this kind of global pandemic, most Florida businesses know what it means to face a disaster, gather your resources, and push through it to the other side.

At Kaufman Rossin, we serve thousands of small and middle market businesses. We’ve been advising companies for more than half a century, helping them survive disasters like hurricane Andrew and the Great Recession. This period will define your leadership, the existence of your business and its health and strength when this is all past us. This is the time to carefully position your business to survive, seize opportunities and a better outcome post-disaster.

Whether the economic impact is one month, three months or longer, it will pass. To prepare for the future, here are recommended actions to start implementing now:

1. Plan your liquidity weekly (or daily).

If you have not already done so, prepare your 13-week cash flow model today. Update it daily. Build in best-case, medium and worst-case scenarios, and understand the underlying drivers. It will help you and your team focus on liquidity, speed up collections, identify deferrable payables (like from larger well capitalized companies or the IRS), delay 401-K contributions and prepare you for ongoing conversations with your financing sources.

Plan to share that analysis and scenarios with your bank/ financing sponsor/ investor as well as your management committee and perhaps key employees on a regular basis. It will let them know you are being proactive and help in conversations in the future, whether for covenant relief or anticipated bridge loan needs. Since we do not currently know how long this period will last, bridge loans and disaster relief loans may become prevalent. You are at an advantage preparing and applying for one NOW as opposed to waiting until there’s more demand.

If you need a sample 13-week cash flow model, or you need help in communicating expectations with your bank or investors, reach out to us.

2. Evaluate and negotiate terms, conditions and strategic partners.

Now is the time to re-evaluate and potentially request looser terms on your contractual agreements. Consider your supply chain partners, and evaluate marketing nice-to-haves versus need-to-haves. Consider price incentives, like offering a small upfront discount, but requesting faster collection with customers who are well funded. Run various scenarios through your 13-week cash flow model to understand their financial and liquidity impact.

Evaluate all of your critical vendors and strategic partners. Will they be around next month? Stock up on key items, but also have an alternative ready should that chain dry up temporarily. Again, track the financial and net working capital impact through your model.

3. Seek non-traditional financing sources.

One thing is almost certain – your capital structure will change during this period. Be prepared to define it proactively and not reactively; don’t be complacent. While your current 13-week cash flow may put you at ease, prepare for your worst-case scenario – or even worse. Unlike larger companies, small and middle market businesses may be limited in the sources of liquidity you can tap into.

Consider seeking a low-interest bridge loan or disaster loan relief which are available now. Economic Injury Disaster Loans from the U.S. Small Business Administration (SB are now available in Florida, providing small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue. In addition, our state is abundant in family offices and private lenders with cash on the sidelines available to smaller non-banked investment opportunities. Reach out to your network, with your financials and 13-week scenarios ready for consideration.

Even if you do not believe you need it now, consider getting the extra cushion to provide you peace of mind. It will also allow you to keep your capital structure balanced and avoid mismatching short-term financing like credit cards or predatory loans with a longer term (or unknown) time horizon.

4. Track all one-time impacts and changes resulting from the current environment.

Every business will feel the impact. Tracking key metrics and changes in performance and net working capital will be key in projecting a normalized state once the tide turns. A few years from now you will look back and see the effects of decisions you make now which impacted your bottom line or cash liquidity. Maybe you failed to collect faster where you could have or experienced delayed inventory turnover due to supply chain effects. You want to be able to quantify the pro-forma impact of these one-time events and present to future investors. Be diligent in keeping track.

5. Communicate, communicate, communicate.

Whether it is with your bank, your investors or employees, now is the time to dispel panic. Let them know the thorough measures you are taking to plan and prepare. Your bank, investors and employees are on your team and collectively rooting for you to overcome the challenges. Concise but regular communication can keep the lines open and facilitate any additional relief you may need.

6. Care for your most valuable assets.

Last but not least, express care and support for your employees and their loved ones. Your actions and considerations will be remembered and stand out for years to come. If necessary, assist your employees in identifying programs which may help you weather the storm together.

If you were planning on a growth financing round or upcoming exit in the next few years, don’t despair. Whether 1 or 3 months from now, this state of emergency will pass. Your long-term prosperity and valuation are mostly dependent on actions you can take now: planning your liquidity to survive and positioning yourself for opportunity to prosper once the tide turns.

While working remotely and taking care of our families and our well-being, our team at Kaufman Rossin is fully functional online and dedicated to being available to you during these challenging times. Please contact me or anyone of our team should you need assistance.


Nikoleta Angelova is a Business Consulting Services Director of Transaction Advisory at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.

  1. […] negotiations. In other words, your quarterly forecasting tool, more commonly referred to as a 13-week cash flow model, is based more on expected (versus “known”) inflows and […]

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