Business Topics

Cash is King in Pandemic

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MCN Editor Beth Gainer

On April 1, hundreds attended the METALCON webinar titled Re-Igniting Sales and Operations Amidst the World Health Crisis. Two speakers offered the eager audience advice on continuing with business even during the COVID-19 crisis.

“Cash is king right now. Each of us has to do scenario planning around cash flow for a best-case, worst-case, and middle-case scenario. I think it’s critical,” advised METALCON co-founder and CEO Frank A. Stasiowski, fellow of the American Institute of Architects and founder and CEO of PSMJ Resources Inc., Newton, Mass.

The other speaker was Rob Haddock CEO and Founder of S-5! Metal Roof Innovations, Iowa Park, Texas, whose customers are distributors. Haddock agreed that planning is key. “I’m a big believer in Plan B. Plan B is how you cheat Murphy out of his due” he said. “And as soon as you exercise Plan B, then you need a new Plan B or a Plan C.”

Stasiowski said that businesses needed to obtain cash immediately. “Lack of cash kills businesses,” he said. “You need to get cash flowing in any way you can, and that means those of you who are [running] small businesses should be applying for the CARES Act grants that are coming out to small businesses – whether or not you need the cash.” 

On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act, designed to provide economic relief for small businesses that have been affected by the coronavirus. According to Stasiowski, small-business owners must apply for grants through banks. Yet confusion exists about how small companies will get their hands on the much-needed funding. “The banks are not fully up to speed yet. None of the banks knows exactly how to get the money yet,” Stasiowski said, “but I think you need to be ready for when the money is there and get as much money as you can into your cash flow system.”

The results of a poll taken during the webinar revealed that most attendees were not doing cash flow planning. Percentages were not provided.

Other polls of attendees during the webinar revealed that 62 percent said there was no supply chain disruption, while 38 percent claimed they were experiencing supply chain issues; 89 percent indicated they had not furloughed staff; 70 percent were optimistic and expected a rebound in business by mid-summer; and 77 percent expected strong sales in the fall as a result of pent-up demand.

Haddock said there will, indeed, be pent-up demand. “We may see a lull in business from May forward for a couple of months; it depends,” he said. “That demand won’t go away; it’s going to be postponed, and it is going to hit in the fall. And we want to be ready to meet that demand.”

Maintaining strong relationships with vendors is a sound business practice, according to Haddock. “To be forewarned is to be fore-armed,” he said, adding that having alternative vendors that offer the same services can be a good way to do business. If one vendor doesn’t work out, then another might. 

Haddock also recommended evaluating how business is going weekly, especially given the current fluid situation. “What we can’t predict today, we may be able to better predict the situation a month from now,” he said. Stasiowski agrees. “Discuss cash flow and budget with managers weekly,” he said. “If you are not, then you’re not doing good crisis leadership. You don’t want to make decisions today that will hurt your future or your decisions about your future that will hurt today.”

Stasiowski discussed the optimism of the architecture and engineering sides of the business. He said that a few days prior to the webinar, 83 percent of about 1,000 professionals in these fields were seeing no delay in projects and that most states had deemed construction an essential service.  “A lot of the projects are critical,” he said. “Hospital work is critical, infrastructure work is critical, things that are happening in many of the facilities we are dealing with are critical, so things have to get done, and our industry, probably better than most industries, is positioned to not be impacted by a two-, three-, or four-week interruption right now.”

He added that while there was a downturn in proposal requests for private sector funding projects, most public projects and large, ongoing projects were not seeing a downturn.

Stasiowski and Haddock said that now is the time to communicate with customers, even if that means finding new ways to communicate, such as through Zoom and other video conferencing tools, as well as webinars and blogs. “You can assess exactly where your customers are right now – relative to their cash flow, relative to their strategies, relative to their fear because a lot of the customers have fear,” said Stasiowski.

“People really don’t want this new normal; I think what they really want is to get back to work and get things done,” he added. “Whenever a crisis comes up, you want to assess your risks and your risks of decisions. Right now no decision is a risk. To do nothing is a risk.”

Haddock agreed that action is key. “We as a company are not just going to get through it. We’re intending to grow through it,” he said. “As far as business as usual, well there is no way that business is or can be usual in this crisis; there’s nothing usual about it. I think the opportunity lies in how we react to the external forces of which we have no control. The whole world is shaken, and we as a company have embraced the shaking from the standpoint of recognizing the opportunities within it. We are always looking for the bright side. It requires a shift in thinking and swift changing to survive and prosper in the longer term, and that’s what we’re doing.”

 

“I don’t believe this is the end of the world, but it will change the way we do business in the near term for certain,” continued Haddock. “Some of those changes in the near-term will be good enough to continue in the long-term. We have to be prudent, and prudence just means exercising sound judgment in view of practical matters, current circumstances included. It does not mean panic. Panic just clouds prudent thinking.”

 

During the webinar, the speakers mentioned that METALCON’s goal is to have weekly free one-hour webinars, with the next one, Re-Igniting Sales and Operations Amidst the World Health Crisis Part 2, scheduled to take place April 8 at 1 p.m. Eastern time. To register, visit https://bit.ly/3dOwf02.

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