During this time, we start by first extending our hopes that you and your family, employees, associates, and friends have remained healthy, safe, and secure during this most tumultuous time.
We also hope that you have adapted to working from home. Some, like myself and my partners at Water Street Advisors do this every day. Whether you are a veteran at it or just finding your way, the change of pace offers a time of catching up, prioritizing, and contemplation. Those of us in the Mergers & Acquisition industry are trained to stay abreast of breaking news affecting the economy. The last few weeks have been a veritable sea swell of information from well-meaning experts offering amazing opportunities for learning and enrichment to chart a course through this crisis. We have seen the assistance of leaders from all branches of Government, who refreshingly have come together to try to offer solutions.
Whether you believe that this will be a “U” or “V” shaped downturn in the economy, at some point we must start focusing on getting back to normal, whatever the ‘new’ normal will be. I have never snow skied, so I have no idea what it would be like to perform a ski jump. But, I have jumped some things (on either a bike or a sled when I was a much more flexible kid), and there is a point that you can sense when to push downward against gravity just before you are about to become airborne. Thinking positively, perhaps we can successfully launch once we sense we are near being airborne again. Some things to consider:
- If you are in the process of accessing the funding made available under the CARE Act, or if you are in the process of selling your business, it will be important during this time to keep detailed records of expenses incurred and revenues not realized as a result of the Covid-19 virus actions. This information will be important to have to document the reasons/uses for the loan proceeds, and reasons why this was a complete anomaly in your business.
- While it may not be as robust of a Seller’s market as it was prior to this March, there will still be a large amount of cash looking for investments when things begin to return to normal. Remember, this is not a replay of 2008 – banks are much stronger financially and the US Government has just pumped trillions of dollars into the economy.
- If you want to sell your business but have been waiting for the perfect time, when things rebound it may be a very good time to revisit a sale. Consider that buyers will be more willing to accept explainable poor performance during this time especially if the business bounces back quickly when the economy picks up again.
- Get your house in order. This is a great time to make sure that your corporate records are correct, that you have a succession plan in place, that you have a funded buy-sell agreement, and that you have talked through your plans with your family. Those things that you did not have time for when you were busy - now is a good time to tackle them.
- Need advice or advisors to help you with the items in that last bullet point? We are ready to listen and help. Being ready to go to market when the clouds clear will put you ahead of what could be a big crowd.