Greg Herring knows the numbers tell a story, and when it comes to COVID-19, the numbers only continue to get more daunting.
Herring, the founder and CEO of The Herring Group, a consultant company, hosted a free webinar Friday for business owners to help answer some questions that keep coming up as state and federal mandates become more pressing. These questions include things like, “Will my company survive a shutdown?” “How do I keep my employees healthy?” “Are my employees consider essential or nonessential?”
Herring said there’s three critical steps to take as the situation becomes more urgent. First, build liquidity immediately – he said you’ll need cash soon. Secondly, understanding the customer’s mindset by segment is important, as some homeowners will probably want to discontinue service but HOAs might not. Have narratives ready to deliver to convince clients that they should continue service. Finally, plan for several outcomes or scenarios that happen as a result of the coronavirus outbreak. Herring said it’s largely possible many companies will lose all of their enhancement revenues, or they could lose a large fraction of it.
Herring said so much of this situation is beyond your control – be as prepared as you can and be ready to act fast.
“We don’t know what will happen, but you and your management teams can identify the scenarios that are likely to exist,” he said. “You probably need somewhere between three and five scenarios.”
EVERCHANGING LANDSCAPE. Herring said there’s no way of knowing for sure how many coronavirus cases there are in the U.S. because the country’s testing has been slow to come online. Through March 9, they had only performed a little over 15,000 tests and a week before that, just 4,000 tests. Comparatively, South Korea – which has the lowest fatality rate of any country afflicted by coronavirus – has performed roughly 210,000 tests since March 9.
With an influx of U.S. testing surely on its way, Herring knows that the frightening numbers of coronavirus confirmed cases will only rapidly increase. He guesses one in 10 tests will confirm a coronavirus patient. With a finite number of ventilators and ICU beds available, Herring said what we’re looking at is a brute force social distancing, which is when businesses shut down. At the time of his webinar, Herring could only acknowledge that Pennsylvania and California closed all nonessential businesses. Other states have since joined that movement and others will continue to do so this week and next.
WHAT’S NEXT? Herring offered several tips on what to do as we prep for the unknown COVID-19 landscape:
- Communicate with customers, let them know you have their interests in mind.
- Monitor the situations with H2B visas in Mexico. National offices could close, so stay on top of those details and ensure they have appointments scheduled.
- Pull your revenue forward. Get your plants in the ground and move fast.
- Ensure real drive-time reduction and make sure that’s dropping to the bottom line for you.
- OSHA is treating COVID-19 differently from the flu, so report and record accurately. Monitor your employees’ symptoms and be ready for some to test positive.
- Collect your receivables as quickly as possible, determine your monthly burn rate, and look into securing a SBA loan that can go up to $2 million.
- Calculate the cost of the restart. “It’ll be more expensive than you think because things will not be working efficiently,” Herring said.
- Secure your vehicle’s equipment and inventory. Herring said criminals haven’t gotten the memo about staying inside.
- Communicate with your laid off employees and even host a Zoom or Skype meeting with them and their families.
- And, of course, communicate with your customers. Ensure they know how COVID-19 will affect the business and their landscaping.
Practice safe habits in the meantime, too. This means frequent handwashing and avoiding cross-contamination problems, such as sharing water jugs. Herring recommends keeping the windows open in trucks and encouraging social distancing with jobsites and staggered start times. He also said make it clear with employees your expectations in terms of reporting illnesses.
And finally, he recommended leadership should find a source of inspiration as it’ll be a tough few months. Find a book, historical figure, movie, etc. to look up to in this time of crisis and think about how it affects your own leadership style.