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 ...