What's Next for my Business?
I doubt that there is a business owner out there not asking this question. Honestly though, we just don't know. In these periods of uncertainty, one reliable exercise is scenario planning. How do we do this? For starters, begin by surveying the entire commercial landscape, taking in the details as they are now. As you gather and analyze your data, look for patterns and trends that can help you plot out different scenarios your business may face, and how to respond to them. A new work environment is unfolding, which will come with new opportunities and new challenges.
To aid you in your scenario planning, we have a few topics of importance to address and some related links:
OSHA impact:
- OSHA considers COVID cases a recordable workplace incident[1]. How might this impact your compliance and insurance requirements, and the costs associated with them?
Employer liability considerations and creating safe work spaces
- Congress is currently debating liability protection for employers. This will determine what you need to do to protect your business from legal action. Several useful links below on this topic.
Commercial real estate
- If your lease is coming up this year, what do you do? How much space do you need? What is space even worth? Are there sublet options? Short-term options to keep you flexible?
- If your lease is coming up in the next 12-24 months, you’re in a much better position, but these same questions still apply. What is your business going to need / want / require?
Work from home
- This concept is still evolving. Even after we "reopen", employers need to consider how many staff truly need to be in an office space. What are the benefits of remote work vs. having a dedicated office? This will be a major cultural shift for many organizations. How will you adapt successfully?
School in the fall
- This too, is very much evolving and will play a significant role in whether and how many people work from home. Review your state's policies for re-opening. How might you need to accommodate some employees?
Payroll tax holiday & more stimulus
- Keep this on your radar and talk with your accountant about how to best take advantage of the tax & stimulus benefits that might be available to you.
Finally, consider that the true economic costs of the virus are still being tabulated. Banks are setting up huge reserves to deal with what they anticipate to be a tsunami of bad loans. These bad loans will have knock-on economic effects.
Creating a "rainy day" fund for your business would be ideal, but this isn't possible for everyone. So another way you can protect yourself is to be very cautious with lines of credit (your own, and those you extend to customers) and aggressively monitor your cash flow needs.
These variable are constantly shifting and changing, but starting to prepare these scenarios now will save you time, money, and put you ahead of your competition.
[1] https://www.osha.gov/news/testimonies/05282020
Other helpful / related links:
https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html
https://www.cnbc.com/2020/07/18/jamie-dimons-warning-for-the-us-economy.html
https://finance.yahoo.com/news/bofa-joins-banking-giants-setting-110904716.html