Good morning everybody. If you are like me today certainly does not seem like a Friday, or that we are heading into anything we would normally call a weekend. Until we figure out what the new normal is, here are some resources that every business owner should be taking a look at.
Business continuity planning phase two
In phase one we laid out how to have a basic plan and get that plan documented so no one is running around with their hair on fire when an emergency strikes. In phase two we simply refine what we've already used and set up in phase one. Keep in mind we're using the COVID-19 situation as our model scenario so we will further that scenario.
1. The plan you laid out in phase one is probably pretty short, one page 2 at the most. So let's anticipate questions that employees, customers, or vendors may have, and create in FAQ section. this doesn't have to be 50 questions but four or five of the most likely questions to be asked:
a. Will i still get paid if we can't come to work?
b. Can I take my computer home?
c. If I am working from home, and my kids are home from school, will it still count as time worked?
d. Do we use Skype, Zoom, Webex, whatever to communicate to each other?
e. Am I supposed to cancel all of my external meetings?
f. What are the expectations if someone in my household has COVID-19?
g. Will we be “open for business” or shut down when we can’t come to work?
h. Who is my point of contact for questions?
i. Do we keep our regular staff meeting schedule?
j. What do I tell customers who ask if we are able to get product slash services to them?
2. Business system backups. Depending on your setup, you may have cloud based backups or local based slash tape based backups.
a. Cloud-based: The beauty of cloud based backups of course is that you likely don't need to do anything. The backups will move around and be available for you wherever you are working. Just make sure more than one person has access to the admin portion of your back up service.
b. Physical back-ups: First, if you are still using a physical back up process now is a great time to consider upgrading to cloud based backups. More to come on the technology side in a couple of days. However if this is your reality, we need to build in specific instructions as to who is expected to do what with the physical backups in situations where people are working remotely and or otherwise not allowed in the office. Be very clear on who is to go retrieve the backups and what is the schedule for alternating the person in charge of picking up slash replacing the backup files. (Remember – be specific with names, days, and times. A statement like ‘accounting changes the backup files when necessary’ doesn’t help anyone.)
3. Insurance. Your business may or may not have business interruption insurance that could kick in. I do not expect anyone to have every coverage and coverage trigger memorized , which is why we rely on our insurance agent. Documented in your plan who will reach out to your insurance agent make sure they have the agent's contact info to see if the situation is covered by your business insurance coverage. If it is covered make sure to follow the guidelines for a claim and start pulling together the paperwork immediately.
4. Government/Laws Point Of Contact: Document who is to be the liaison for any federal state or local government interaction . This person should also be the one who is tasked with paying attention to all pronouncements from each agency that may apply, up to and including things like social distancing and work from home policies. In a time of crisis, without any other direction, everyone will tend to be want to watch everything . And then we end up with 25 different versions of a story instead of one based on a credible source.
The Latest on Stimulus Packages
We have some updated and more concrete info on some stimulus packages, even though there are many proposals still being worked through congress.
- Starting April 2nd, employees will be given an additional 2 weeks leave from employers.
Tax credits for businesses with fewer than 500 employees will cover the cost:
Two weeks of paid sick leave for employees who have been quarantined, have a sick family member, or have been affected by school closings.
Up to three months of paid family and medical leave amounting to no less than two-thirds of regular pay for those employees listed above.
o It is still possible that businesses with fewer than 50 employees will be exempt (still a little fuzzy right now)
- SBA/Emergency Loans Update (Currently approved, though additional programs are likely)
o Emergency Loans – directly between government and the business
Not free money
Could take 3-6 months to approve
Requires personal guarantee and a lien on your home
If loan request is over $375K, additional documentation and proof of ‘last resort lender’ may be required
o SBA Changes
Government is trying to incentivize lenders to take on riskier loans than they otherwise would entertain
Line of Credit limits move from $350K to $1 million
Government guarantee fee goes away
Loans over $350 require lien on business assets and your home
o If this COULD be of interest at some point, there are some things you should be doing RIGHT NOW:
File your 2019 taxes (payments not required until June)
Update your personal financial statement
Create a current debt schedule
Understand/know your average monthly Operating Expenses (OPEX) for March 2019 - September 2019 (6 month average from prior year)
Pull together copies of 3 years of personal and business tax returns
Calculate your target Line of Credit ‘ask’:
• Greater of 10% of revenues or 75% of AR+Inventory
- Working it’s way through congress (so do not count on it ending up like this):
o $500 billion in direct payments to US citizens ASAP
o $50 billion in loan guarantees for the airline, cruise, and hotel industries
o Eliminating some taxes/fees for airlines
o Financial assistance to hourly wage workers affected by reduced business hours.