Four Surprising Business Observations During COVID-19 – What We’re Seeing Now

What are successful companies doing right now that other companies aren’t?

1. 1. Quickly pivot and adapt. We’ve seen nimble businesses come up with creative solutions for this new business environment. They have developed new product lines, distribution channels and business models that have allowed them to augment what would have otherwise been lost revenue. This entrepreneurial mindset has allowed these companies to survive and even thrive in this challenging time. What is surprising is how quickly companies have been able to adapt and change.

      Example — Several clients quickly shifted resources toward existing or new sales channels such as e-commerce. Some are expecting these pattern shifts will continue indefinitely. We have been assisting our clients with the risk and controls evaluation process related to these new/expanded business products/services.

       
   2. Implement cost containment measures. We’ve seen companies position themselves successfully by taking cost-containment steps such as right-sizing their workforce, reassessing liquidity and cash flow expectations and approaching lessors to receive deferred payments and concessions. Companies that were quick to identify cost containment areas tend to be more successful in the ultimate achievement of objectives. Speed is important.

      Example — Several clients took steps to immediately reduce executive compensation and revisited their arrangements with suppliers. As time goes by, counterparties seem to be pushing back more on requests for concessions.

       
   3. Determine if outside funding is necessary. It seems impossible to predict what life will look like when this is over or even forecast what the next six months will bring. However, some of the businesses that we’re working with have determined that they don’t need outside funding such as PPP loans for a variety of reasons. The application, approval, funding and tracking process is cumbersome, not to mention the public scrutiny some companies are seeing as a result of taking the money. During the application process, many companies are analyzing cash flow needs more granularly and realizing that a loan isn’t necessary.

      Example — Many companies jumped on the bandwagon to apply for PPP loans, only to find their businesses ultimately were healthy enough to do without the government assistance.

       

• Strong accounting and financial teams in place. We’re seeing great things from accounting and finance teams across industries. They are dealing with normal day to day operations, plus handling COVID-19-related business issues.

  The current environment is creating more work for these teams. They are now dealing with disclosures in accounting, navigating additional audit procedures, going concern determinations, impairment and PPP loan application and tracking. There are also new challenges related to managing a remote workforce, dealing with cybersecurity issues and internal controls.

  Companies are working harder than ever to position themselves in the best possible place for the future, and they are often doing it all with a reduced workforce. Many companies are using external resources on a consulting basis to keep costs low and still be able to access the expertise necessary to succeed.