How to Make Remote Teams Accountable
One of the many, many changes that COVID-19 has ushered in is the extreme uptick in people working remotely. Social distancing has made working from home a necessity for millions.
The technology that is allowing remote working to take place has matured greatly in the last decade. Today, it is possible for team members to work from virtually any location. Of course, as with most technologies, there is a potential downside. Accountability can become a significant challenge with remote workers. Of course, the more remote workers you have at a given time, the greater the potential challenges will be.
Many businesses are struggling with the phenomenon of remote working, as it is something new for them. Under normal circumstances, large numbers of employees working remotely simply wouldn’t happen. Writing for Inc., Elise Keith, Co-Founder and CEO of Lucid Meetings, recommended key steps businesses should take to help ensure that their employees stay on target while working from home.
Don’t demand high productivity
To be effective, Keith says remote work environments must avoid four major mistakes. Employers, especially those unfamiliar with remote work, often demand too much productivity right out of the gate.
Remote teams can be very productive and even outperform their in-office counterparts. Put everything you’re doing on one of three lists: Start, Stop, Continue. “Challenge yourselves to get the Start and Continue lists as short as possible while still ensuring critical business operations.”
Don’t Assume this is Temporary
It’s a mistake to assume the current pandemic situation is temporary. Even if COVID-19 disappears, other crises will occur, and it makes sense to be prepared. Why not “get good at working remotely?” Teams with good remote working skills are more resilient now. You can be sure your competitors are working remotely, too.
Be Open to Technology
Don’t automatically ban the use of non-approved tools. Now is not the time to fret about what software tools people are using. “You can’t have it both ways. Either give your teams the resources they need to be effective or decrease your expectations,” says David Horowitz, the CEO of Retrium, a platform for running online retrospectives.
Keith suggests creating an expedited process for the adoption of new tools. If your team finds a new tool that boosts productivity, you should consider buying it.
“Software costs pale when compared to the costs of lost opportunity,” Keith points out. Set aside restrictive thinking and become more open-minded and flexible. Remember, your top goal and that of your clients is to stay in business until the pandemic has passed.
Stay Flexible
It’s a mistake for managers to dictate hours and response times. Remote work is, by its nature, going to be more flexible. Trying to micromanage every move digitally is simply not a savvy move and will hurt morale.
Instead, Keith thinks businesses should opt for having a daily meeting via phone or videoconference with the team. Consider having a one-on-one meeting with every team member, also.
Adapt and Survive
“Remote work may be new to you, but that doesn’t make it unproven or risky,” Keith says. “Stop trying to control the situation and focus instead on finding the new opportunities created. Remote work is different, so slow down and learn from many of the excellent resources out there.”
Remote work can be highly effective for you, especially when used correctly.
Copyright: Business Brokerage Press, Inc.
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Now is the Time for Focus
As of late April 2020, there is one thought at the forefront of the vast majority of businesses around the globe, namely, what steps do I need to take to stay in business until the COVID-19 pandemic is over or recedes? There is no doubt about it, this is the “big question” of the day.
The global economic structure hasn’t seen this much uncertainty since WWII, and some would argue that we’ve never seen this level of simultaneous global economic disruption. Knowing what steps you need to take to keep your business up and running is of paramount importance.
In short, business owners must be sure that their businesses are in good shape. You should take every step possible to position yourself for when the economy is back up and running at full steam. Right now, there is a degree of chaos and uncertainty, but this will not last. As a business owner, you need to focus on getting your house in order.
Now is not a time to take a vacation. Instead, you should be focused like never before on the inner workings of your business. You should be striving to find ways to improve every single aspect. Of course, this is easier said than done. There is a real psychological hurdle, as for many people it seems as though everything has “stopped.” While customers, clients, and staff interactions have been dramatically reduced, now is not the time for you to “check out” mentally and wait for things to get better.
Rarely, if ever, has it been more important for owners to invest as much of their time and energy as possible. After all, as a business owner, you have already shown a great deal of drive and determination, as well as at least some level of out of the box thinking. You have proven that you have what it takes to get through the recent challenges.
Many will feel dejected right now. But you should pool on the same skill sets that allowed you to create a successful business in the first place. What obstacles did you overcome in life to create your business? Was your business created during a prior economic downturn? The odds are that you already have skill sets and strengths that will allow you to survive the fallout of COVID-19.
For business owners who truly want to survive the economic stress of the pandemic, ultimately, focus is key to survival. The odds are excellent that there are revenue streams and different approaches that may have been overlooked. Your job is to identify and then exploit those avenues.
Copyright: Business Brokerage Press, Inc.
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Questions for Helping Businesses Survive the COVID
Developing Your 90-Day Plan
Those who want to make sure their businesses survive this pandemic will want to achieve a laser-like focus. It is important to realize that the forced downtime triggered by the pandemic affords you the opportunity to work on potentially neglected aspects of your business.
Summed up another way, now is the time for dynamic and focused action. In this article, we’ll address what you can do to help your business survive this unusual time period.
Reevaluating Your Business
It’s time to step back and look at every aspect of your business, including your processes. You should be encouraged to find new ways of doing things. In short, now should be viewed as a time of opportunity to reboot your business. That way when the pandemic has subsided, and your business picks up once more, it is more efficient, more effective, and more competitive.
Scott Bushkie, Founder and President of Cornerstone Business Services, recommended that business owners create 90-day plans where they look for ways to innovate. This strategic plan should focus on what they are going to do and what they want to accomplish. It is critical that there is an actual plan that achieves tangible results and not simply a list of things that should be accomplished. Listed below are a few questions you should be pondering.
- How can I outperform the competition?
- How can I innovate?
- How can I increase my use of technology?
- How can I deliver my products and services in a different way?
- How can I reduce my operational costs?
- Have I reached out to my suppliers and creditors for assistance?
- Have I applied to applicable SBA COVID-19 focused programs?
- What do I want to accomplish in the next 90-days?
It’s Time to Reboot
The main point is that businesses should not look at this pandemic situation as some sort of “miserable and stressful vacation,” but instead as an opportunity to reboot what is not working, and look for ways to make improvements in every aspect of your business. This process begins by asking the right questions and striving to find the answers.
In answering these questions and finding ways to help boost your rates of survival, you should turn to every asset at your disposal. Why not ask your management team as well as all of your employees for ideas that could help their business? Everyone should understand that owners are looking for ways to keep their business healthy while navigating the pandemic.
Now is the time for reflection, short-term and long-term planning, and tangible actions. Business owners should also consult with a range of business professionals, including, of course, business brokers and M&A Advisors. Brokers are uniquely positioned to help business owners through this crisis.
Copyright: Business Brokerage Press, Inc.
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GABB Covid-19 Update: Loans, Lending and Liability
The second round of the SBA’s Paycheck Protection Program funding, released Monday April 27, is being distributed by SBA lenders, and is expected to be depleted within just a few days, David Brindley, VP of Small Business Lending at Live Oak Bank, told the GABB in a Zoom meeting on April 28.
Brindley also said the new round of PPP funding is tied to the SBA’s 7(a) loan program, the SBA’s primary program for providing financial assistance to small businesses. The 7(a) program will also be depleted when the PPP runs out of funds, although he anticipated that Congress would approve additional funding in the near future, although “we don’t know when for sure.”
Hear what Brindley had to say at the meeting at this link.
Many other SBA lenders in the GABB told us that they were extremely busy working on PPP loan applications that had been submitted earlier. “For the last month, it has been all hands on deck as everyone in the bank jumped in to help process PPP loans,” Brindley said. Like many other banks, Brindley’s bank “took the approach that we would take care of existing customers first and then open up for new customers.”
His bank temporarily paused most other lending in March to focus on the relief lending through the CARES Act. When the 7A program resumes, Brindley says he expects the SBA to guarantee 90 percent of the loan, as opposed to the 75 percent they have covered in the past. Lenders are going to take a new approach to due diligence, he said. Live Oak looks favorably upon businesses with a strong cash flow and good management.
“We will also require projections from buyers,” Brindley said, to make sure they really understand the cash flow and working capital needs of the business. Also, as part of the CARES Act, the government will make the first 6 months of payments for new SBA loans that close before September 2th.
He ran down a list of potential questions for future SBA loan applicants, including whether the business closed during the quarantine, were customers and suppliers significantly impacted by the shutdown, what disaster funding did the business receive, and why does the buyer think it’s prudent to go forward with a business purchase in the midst of uncertainty.
“We’re going to do even more due diligence than we did before,” Brindley said. “We want to make sure there’s more working capital built into our projects.” Toward that end, his bank — the largest SBA lender in the country — will add additional working capital into loans so that businesses have adequate operating capital in reserve.
“We are open for business right now,” Brindley said. “for historically strong transactions and we are willing to use a common-sense approach to mitigate a Q2 Covid 19-related impact to the business. If we can see that a seller’s revenues are trending back to historic levels and there is sufficient working capital built into the deal structure, we will look at transactions today.”
Attorney and GABB Affiliate Lawrence Domenico, a partner in the law firm of Mozley, Finlayson & Loggins LLP, discussed potential liability as businesses prepare to reopen fully or partially. The Georgia Governor has issued specific guidelines for businesses to safely open, as has the CDC.
“I’ve never said ‘it’s not clear, or I don’t know” so many times in my practice of law as in the last couple of weeks.” Language within the gubernatorial order appears to exempt reopened businesses from liability, but it isn’t clear that will give businesses blanket immunity. If a business misses covering one of the safety items listed in the order, maybe you don’t get protection from liability. Traditional body of common law considers whether an entity acted reasonably, and there is varying advice on that front.
“Every business owner is going to have to decide for themselves what is reasonable,” said Domenico. “I think if you try to follow the CDC guidelines, try to follow the governor’s orders, you will have a pretty good defense, but I’m not going to be able to tell you you’re in the clear no matter what.”
The GABB plans to have weekly Zoom meetings on Tuesdays for updates on aid available during the COVID-19 crisis. Check our blog for information on joining future calls.
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An Unexpected Symptom of COVID-19 – Impairment Expense
By David Hern, CPA/ABV, ASA, GABB Affiliate and financial analyst
If you haven’t heard of COVID-19 or Coronavirus–or as my 6-year-old refers to it, the ball with red broccoli on it–then you’ve been living under a rock. Regardless of your quarantine efforts, your business is experiencing a severe coronavirus symptom that could have a major impact on your 2020 financials and audit. For any company that completed an M&A transaction in the last few years, large impairment expenses are likely to occur by this time next year.
COVID-19: my 6-year-old refers to it as the ball with red broccoli on it
Many companies are in the throes of their 2019 audits and are thankful they do not have to pile yet another item on their to-do list. These same companies are probably finishing up purchase price allocations (PPAs) for ASC 805 – Business Combination accounting from deals completed in 2019. However, CFOs and Controllers across the US need to be developing and saving their current COVID-19 financial projections immediately. Why? For starters, many of these companies likely chose to switch to amortizing goodwill over a 10-year period after completing their PPA. What these executives do not realize is just because you are writing off intangible assets does not mean they do not need to be tested for impairment. U.S. generally accepted accounting principles require you to test your goodwill for impairment expense under FASB ASC 350 if there has been a “trigger event.” I can promise you every auditor worth their salt across this great land is going to define a global pandemic which we’ve not seen the likes since the Spanish Flu will as a “trigger event.” At one point, the major stock indices were down well over 30% from their highs.
There are several triggering events noted in ASC Topic 350 that could apply including:
- Macroeconomic conditions such as a deterioration in general economic conditions,
- Overall financial performance such as a negative or declining cash flows or a decline in actual or planned revenue or earnings,
- A sustained decrease in share price, etc.
Consequently, valuation analysts will have to be engaged to determine if a decline in fair values of various reporting units are below their carrying amounts resulting in an impairment expense. Sofer Advisors would be happy to talk with you about your unique circumstances and how they may be a triggering event. Please contact us for a free consultation.