With covid-19 testing just beginning to be readily available and a vaccine nowhere in sight, we will be heading back to work during a timeframe when the States and US government are still creating and updating the work safety rules, responsibilities and expectations of the business owner.

Considering these rules appear to be changing almost daily, there is more potential liability risk than ever. Keeping your employees and customers safe will be a very high priority and more difficult and expensive over time. I believe at first, the public will do their best to respect and adhere to the new social distancing rules however, a false sense of security will grow for those who get back out in society and don’t contract the virus. Social distancing will evolve into something less - “so-so” distancing.

Business owners will have to remain vigilant to protect their business, customers and employees which means every business will incur additional costs on both the top line as businesses adjust the work space and customer flow to ensure proper social distancing and the bottom line because of new recurring costs associated with personal protective equipment (PPE).

To make matters worse, first quarter GDP for the United States decreased 4.8% and considering the country was in quarantine for a good portion of the second quarter, we can comfortably say we are in a recession so it’s imperative that you consider every dollar as if it’s your last.

Past performance does not guarantee future results!

In most years, past performance is a reasonable indicator of a businesses’ future results however, not this year. There is so much uncertainty about the future, every business should be looking at their 2020 profit and loss statement (P&L) in three pieces. Quarter 1 should be considered the pre-Covid Quarter, Quarter 2 should be considered the Quarantine Quarter and Quarters 3 and 4 should be considered the Corona Era Quarters. Every quarter in 2020 is going to look different then the previous one and historical data is going to be a poor indicator of what’s to come.

Forecasting your P&L on a monthly basis is critical. Even if your business was considered essential and you did well during the quarantine, there’s no guarantee that it will continue. With the help of your key employees and trusted advisors, you need to meet regularly (at least bi-weekly) and forecast each of the next 6 months. A simple exercise like this will give you a more accurate projection of your bottom line, cash flow and offer clarity on the level of cuts (or additions) needed - especially when it comes to one of your most expensive investments - your employees.

Many of my clients who followed this rolling six month P&L approach, were much quicker to lay off or furlough employees because forecasting the numbers gave greater clarity on what to do now and having a team of executives to help make the decision balanced the emotional aspect of letting people go.

Ironically, almost 100% of my clients who were forced to layoff, during the quarantine became more efficient (i.e. higher margins) and many actually made similar or more profit with less revenue compared to the previous year (and this didn’t even include the payroll protection program (PPP) funds)! What many of these companies discovered was they were overstaffed and had employees who, for one reason or another, were not producing and shouldn’t have been there in the first place.

Eight Weeks Later...

Many of the businesses that were fortunate to be the first to receive their PPP are now the first to discover that they will have to lay off many of their employees again. Unfortunately, every business owner who received PPP, will be forced to make the same hard decision. It will be easier to make if you are forecasting the rolling monthly P&L and involving your trusted team.

Opportunities Abound!

Most businesses were barely breaking even during the best of economic times and it doesn’t matter what industry you’re in, many businesses are going to fail during this recession. The businesses with the strongest balance sheets will survive. The businesses that are forecasting their future profit and cashflow are the ones with the greatest chance to survive - become one of them today!