We’re in it together, at home and work
Whether you want to call the coronavirus an unpredictable, once-in-a-lifetime “Black Swan” or a predictable “Gray Rhino,” everything’s changed.
We’re working from our home offices: our bedrooms, living rooms, sheds, even a treehouse.
We’re home with our pets, our grown children who cannot attend college, our little ones who are no longer in school. For some, it is easier to juggle with an occasional dog bark to go out for a walk or a cat blooper walk across a keyboard. For others, we are acting as teachers by day, all while we work and to get clients’ projects done. We attend zoom meetings, and conference calls with colleagues while juggling multiple video meetings and calls with our children’s teachers. Or being present around the clock for the littlest babies and toddlers, and watching Frozen II. Again. And again.
The finance professionals and accountants here at ecoCFO are doing things that they did not plan, like everyone else in the United States and everyone else on earth, for that matter. We are working on ways to keep our customers’ business’ healthy at the same time our clients deal with the consequences of the spreading virus.
We are creating new budgets, new cash flow forecasts, and two to three contingency plans for companies based on best-case to worst-case scenarios. We are looking at ways for many of our customers to manage cash as calculated and effectively as possible to weather this global emergency and come out on the other side with a viable business that benefits the environment. What is the best way to do this in the short term? What is the best way to do this if it extends into the long term?
We’re applying for emergency Small Business Loans for customers to help them through this time, while with others, we are continuing to work on U.S. Economic Development (EDA) grant applications. We’re working on new risk mitigation plans and ways to emphasize the long-term growth objectives of the technologies that are being developed by our innovative clients. We are preparing to apply for financial relief for our clients under the recently-passed Coronovirus Relief Bill or The CARES Act.
How can we keep these businesses going so that when we come out on the other side, we can continue to battle climate change with a thriving cleantech and renewable energy industry?
Here is a list of advice on cash flow management to consider during these times. Note we will continue to add more advice and financial resources to the ecoCFO COVID resources page in the future.
– Re-evaluate short term cash flow. Be agile and update your cash flow forecast based on the current circumstances and the impact on your organization. For some, this may mean cash conservation and hoarding; for others, it might mean asset and resource acquisitions. We have moved from monthly to weekly cash flow forecasting in some cases to flag issues and intervene quickly.
– Review all capital expenses. Given the current business climate, it would make sense to consider all options, which may mean delaying, canceling, or even accelerating capital expenses to best position the company for the future. In some cases, there may be opportunities to invest in new equipment or people to be situated competitively when the market rebounds.
– Review financing options. Businesses cannot assume that financing facilities and options are available now or in the future. Take this time to contact your bank and investors to understand the market’s implications on your current funding sources, and explore new options. Clean Energy Ventures, for example, has committed to continue to fund and support companies through this challenging period and we have signed on in support. The letter can be read here on the Clean Energy Ventures website.
– Do you need to reduce expenses? Perhaps it’s not drastic cuts that you need, but deferments, payment plans, or supplemental liquidity from new sources like the SBA (see next paragraph). On the flip side, don’t overlook that this is an opportunity to review essential costs and make those changes you may have been putting off for one reason or another. Change is healthy. See this Gartner article on some excellent advice for HR: HR Under Pressure to Cut Costs? Know How to Protect What’s Important.
– Know your options for Working Capital. Businesses need to address short-term capital demands for their continuous business operations. Options include near-term capital raising, debt refinancing, credit support from banks or investors, or support from the government or private foundations. Government agencies are working on stimulus measures to support businesses during this crisis. The Small Business Administration has a list of relief programs on its resources page. The SBA is offering disaster relief loans with interest rates of 3.75% for small businesses and 2.75% for nonprofits. We will post a list of resources for our cleantech industry on the ecoCFO Covid business resources page.
We will be continuing to offer advice and tools to help businesses with their cash management and liquidity. For questions, contact us here.