April 6, 2020—In a weekly newsletter, David Roberts, managing director for Focus Advisors, shares steps that shops can take to remain financially afloat during the COVID-19 situation.
The team at Focus Advisors recommends hunkering down and waiting it out. Other steps a shop can take include:
- Close slow shops and load level work to bigger and more effectively staffed locations.
- Cash is king. Get as much as you can and hang on to as much of it for as long as you can. If you have current lines of credit, draw them down so you have funds in case your lender decides to change the terms of your line.
- Help your people access government assistance. Keep your techs because you will need them when the market returns.
- Apply for federal funding immediately.
- Consider negotiating suspensions or deferral of rent and mortgage payments. Evictions are suspended in some jurisdictions, and some banks are allowing mortgage payment deferment.
Lastly, the newsletter notes that preparing for a sale is still an option. There are buyers, some of whom will consider your 2019 performance when valuing your business. But if you have been contemplating a sale for some time it’s prudent to be ready when the buyers re-engage. A well-prepared business will be at the front of the pipeline when the market returns.