Ep. 78: Heather Bain - Survival Strategies for Small Businesses

Contact Heather Bain: https://www.linkedin.com/in/heather-bain-31223320/

Small Business Planning During COVID-19: https://www.imanet.org/insights-and-trends/risk--management/small-business-planning-during-covid19

FULL EPISODE TRANSCRIPT:
Adam: (00:05)
Welcome back for episode 78 of Count Me In IMA's podcast about all things affecting the accounting and finance world. I'm your host, Adam Larson, and today you will hear my cohost Rouba talk with Heather Bain, owner of Bain CPA Business strategies, and IMA a Small Business Committee Chair. Heather has experience in numerous industries, including oil and gas, real estate and computer technologies among others. In this episode, she discusses a white paper she authored with IMA Small Business Committee on small business planning during COVID-19 the report provides insights to help small, to medium sized businesses, weather the storm, and develop strategies for survival. For another timely episode relating to today's business environment, keep listening and hear from Heather Bain now.

Rouba: (00:54)
I've been reading, you know, the paper that you published and that you were the lead author on, which was Small Business Planning During COVID-19. This was a white paper that was authored by IMA's small business committee, which you chair, and it was published by IMA. So it's been a really interesting subject to read up on. This paper outlines the key steps that small businesses should undertake in order to minimize the impact of the coronavirus on business operations. When publicizing this report, you noted that SMEs are very vulnerable and in dire need of support with emergency response and recovery plans. Why is that? Is there, is there a need for more resilient financial capabilities within the SME segment? Does this actually point out that these may not be at the level that they should be at present? 
 
Heather: (01:46)
Yes, that is always a concern. because small businesses don't have the same resources that large companies have. Larger organizations have many departments and they also have greater financial resources to be able to respond to the lagging in the financial markets and those sort of things. They can allocate more personnel toward different projects that might help them. For instance, you're probably familiar that data mining is very popular and it helps larger companies identify their core competencies and the needs of their  customer base, and smaller companies don't necessarily have that sort of access to know what the broader market is to be able to shift over and offer services on a broader level. They also don't have the same resources to create the technology, but the smaller businesses have the advantage of being a little bit more nimble in the market and able to respond faster because they don't have to shift a large organization. So there are pros and cons, but the smaller businesses are more vulnerable, because many times the owners of the business are dependent on that, the income directly, and they don't have the same financial resources. 
 
Rouba: (03:32)
The question was also to look at, for example, the actual skill level of financial capabilities, like not every single one of them has the opportunity to hire a CFO. 
 
Heather: (03:42)
That, that's absolutely true. They often are. They're wearing all the hats at the officer level, or they have one or two key people that they're relying on. And frankly, many of them don't have any plan in place in the event that one of the key persons is taken out by a COVID virus or is unavailable because of the restrictions in quarantine and that sort of thing. If they're taking care of a loved one during this crisis, and they're not available as much as they were before many small businesses don't have the resources to respond. 
 
Rouba: (04:27)
Would you  in such an instance, is it maybe a potentially as a kind of support that they could outsource at a time like this, where they desperately needed it in order for their business to be, to survive. Would they need this kind of input from third parties potentially? 
 
Heather: (04:46)
Yes. They definitely need to hire a team of experts as much as possible. They need to consult, experienced accountants, attorneys, anyone that that would know how to put a plan in place and then help them have accountability for implementing that plan. 
 
Rouba: (05:09)
The report also provides some major insights on you know, to help SMEs weather the storm and the hope of a quicker recovery post COVID-19. And it's structured around three key steps. Can you, can you tell us a little bit about these steps? 
 
Heather: (05:24)
Yes. Well, the first step is, A: assess the situation.  Taking a completely comprehensive overview of the scenario that each individual business  organization is facing is crucial. So many businesses overlook certain details as they're just in a reactive mode. So there's a financial crunch. Cashflow doesn't look good, so they just react. They start cutting employees, but then that may have unintended consequences for being able to service the customer or they, the small business owner may, may not even be aware that that their rent is not going to be forgiven or there won't be an exception for certain customer contracts. So they need to look at all of the components of their business in order to see what areas they may have weakness so that they can identify potential problems and be proactive rather than reactive in the market. So we advise that cashflow is the most important thing to focus on in the assessment, but also looking at your human capital and looking at the relationships with customers and vendors because supply chain issues have certainly been a major concern. So we say, look at your  legal issues, your financial issues, your human resources issues. I'm looking at the whole picture, your communication and technology piece with your operations and pulling an entire plan together, which is what step two is all about building the plan and you'll need the expertise of people outside of your business. Most likely if you're a small business, since most likely you don't have those resources within your organization. Having a finance expert, having an accountant, an attorney, human resource advice. Sometimes, if you work with government grants, you'll need someone who specializes in government grant contracts. Those sorts of experts can help you pull a plan together so that you, as the person business owner or leader, are able to move forward confident that you're, even though your plan will change, and it is dynamic, you'll still have a total proactive plan in place rather than just responding on the fly as we say. So the third, is the third step is to communicate clearly and calmly. And that is another area that small businesses can be a bit weak in it because the leader and leaders tend to keep many  of these plans and they're in their own heads, rather than communicating effectively to their entire team. There can be a lot of miscommunication and people acting on their own instincts or their own judgment rather than sticking to the plan. And also in this time of crisis, a lot of employees are panicked and there's a lot of fear. And so keeping calm, clear communication, making sure that everyone understands what they need to do and what the end goal is will help to hold the organization together and to still present a cohesive brand to the customer and to clearly identify any issues that might be coming up. For instance, if ...