CONSUMER PRODUCTS: How to lead your brand through and past a crisis like COVID-19
On a recent conversation with Coresight Research, CohnReznick’s Consumer Industry Leader Stephen Wyss provided a framework for leading your consumer brand through a crisis like the current COVID-19 pandemic, focused on the “NOW” stage of our NOW. NEXT. NEW. rapid response framework. He also provided ideas on where the consumer landscape may be in the future.
As a recap, read on for actions that consumer companies should be considering today.
1) Build a tactical approach. Create a weekly revenue/expense budget projection template to manage cash on a weekly basis.
- Projections should reflect volume fluctuations.
- Forecast other expenses based on variable versus fixed costs. For your fixed costs, look at when you are paying them. Speak to your vendors now rather than later to understand how payment terms may be extended.
- Convert the revenue and expense projection to cash flow based on historical assumptions on the eventual receipt of cash and payment of expenses.
2) Appraise your options. Evaluate the options available to extend your cash position based on familiar business practices and “new” COVID-related government relief programs.
- Pull the traditional “levers” to extend your cash, including increasing credit lines and repayment terms and working with vendors on payment plans/deferrals.
- Consider strategies to reduce staffing costs with the aim of retaining qualified staff. Various options are available, all of which should be evaluated from cost, workforce retention, and government relief perspectives.
- Evaluate ways to accelerate payments from third-party payers and government grant/contract agencies.
- Evaluate loan options available through the Small Business Administration (SBA) and the Economic Stabilization Fund, which cover payroll expenses and other expenses such as rent. These loans may be forgivable based on certain criteria. Don’t forget about programs offered by state economic development authorities, or chambers of commerce.
- Review recent tax opportunities with retention credits related to payroll, sick leave, and deferments specific to Social Security.
3) Bring it all together. Once you understand the business levers and governmental relief opportunities available to you, pull the levers, preserve cash, and sustain the viability of your business. Communicate your plans to all stakeholders at the very beginning.
- View this as an opportunity to reimagine yourself, and put plans in place to achieve this goal.
- Determine what your game plan will be. Will this be changing your business model, changing your footprint, adding different aspects into the customer experience with your brand?
- Focus on your brand’s core value proposition and how you may be able to enhance it. Deliver on your brand’s promise to your customers.
For additional insights and details, check out the webinar recording:
Coronavirus Resource Center