Said I was going to start sharing behind-the-scenes reality for small business owners/operators and had a bunch reach out. Here's one:
"Hi Brent - Figured I’d send a quick DM in these unprecedented times. I am the President of a mid-sized (~$50MM revenue) company..."
"Hi Brent - Figured I’d send a quick DM in these unprecedented times. I am the President of a mid-sized (~$50MM revenue) company..."
"It’s a classic family business started by my father and built over 35+ years. We are 100% debt free. Along comes COVID-19. On the one hand, how can I complain? We’re legitimately blessed to be in a better cash position than we’ve ever been!"
"On the other, it’s very easy to see a world in which 8-12 weeks from now we lose 50% of our customers and are shutting down many of our locations. We’ve spent the past several days internally discussing what we should be changing given the new reality."
"I’ve taken the attitude that everything is on the table except payroll for treatment staff (~290 of our ~350 employees). We’ve gotten a little “fat” over the past few years - particularly in middle management and IT spend - and perhaps this is an opportunity to trim down."
"We’ve never been particularly good at letting people go even when they’re underperforming. How can I fire people who are performing when there’s no chance of them finding new employment for the foreseeable future? Our biggest question is vendors, landlords, etc."
"We’ve never managed our cash flow through AP, always pay early and often. However, I’d feel like a complete fool if we spend $2MM+ on AP over the next 8 weeks for locations that we close shortly thereafter."
"I called our largest vendor yesterday and asked them to increase us from 60 day to 90 day terms. Surprisingly, their reaction was bewilderment that we we even called. They said, 'We’d never risk the headline exposure by cutting you off if you didn’t pay us in 60 days.'"
"They’re scrambling more than we are dealing with shortages. Now onto landlords which is much trickier. We have no PG’s on the leases and virtually no corporate guarantees. Every lease is at a different stage in its lifecycle. Our leverage is different at every location."
"Morally, should we be leaning on our landlords? Have they assumed some of this risk by not requiring guarantees? How much goodwill do I want to expend on a 90 day rent deferral when, if that location survives, I’m about to enter into negotiations for a new 15 year lease?"
"Things are (d)evolving so quickly and, for now, we’ve kicked the can and are just sitting on checks and ACH approvals. Again, I know we’re in a MUCH better position than 99% of similarly sized businesses but these are sticky questions that I know every operator is dealing with."
