At O’Reilly Law Group, we work closely with a wide array of business owners on matters of business law, litigation and related issues. We’d like to offer some tips and guidelines on how businesses should be responding to the coronavirus outbreak and the fear and uncertainly surrounding it. The goal is to mitigate any pain associated with immediate financial losses while restoring cash flow as soon as possible and enhancing the prospects of long-term business growth.
Regardless of whether your business is closed completely during the current health crisis, partially closed and sustaining disruptions in hours of operation, or experiencing delays in the supply chain or among clients, following are steps you can take to survive the virus outbreak and help “flatten the curve” of the outbreak:
Revise business forecasts: It’s vital for any company to recast operating cash flow projections in light of the new reality facing our society. Revised projections should take into account the best and worst possible outcomes through the next several months and even into the next one to two years. It’s important to take a proactive approach with lenders, creditors, investors and customers alike. An attorney experienced in business law and related matters can provide valuable assistance and proficiency.
Establish an amended financial and business operating blueprint: Very few companies, no matter how successful to date, have experienced a crisis of this magnitude. Businesses in nearly every field, including but not limited to finance, hospitality, energy, real estate, communications, and construction, are undergoing disruptions at levels that have not been seen for many decades, if ever. Your new strategic plan should include protecting your working capital first and foremost. Now, perhaps more than ever, cash flow is king. Examine your existing credit lines and work to identify current assets that could be utilized to obtain additional financing if necessary. At the same time, create and implement a plan to reduce costs and expenditures.
It’s also critical at this time to thoroughly review all of your business’s credit facility documents and covenants of all types. If potential breaches of covenants are on the horizon, it is vital to consider standstill or waiver agreements with the appropriate lenders. Now is also the time to stay in touch continually with your lenders. Seeking emergency financing or new terms to existing business relationships is not a sign of weakness. In fact, it’s often the most savvy course of action for the future of your business.
Working with an attorney experienced in a wide range of business law matters could be highly beneficial in helping your company chart its course. A law firm with experience in this field can be an invaluable asset in providing guidance on financial amendments, extensions, restructuring or other tactics that may provide relief during this unprecedented crisis.
Open clear lines of communications in all your business relationships: It’s imperative for management to work with the board, if applicable, to develop plans to communicate assiduously with employees, lenders, investors, creditors, suppliers and clients. Seek out professional financial advice regarding financial disclosures required by regulators and oversight bodies such as the Securities and Exchange Commission.
Outside counsel, including attorneys experienced in business law and litigation, could be a significant part of your overall plan in responding to the coronavirus outbreak. In addition, these extraordinary times call for large-scale measures. To complement an experienced legal team, you may want to add a crisis management professional and even a government relations expert if your business is in a highly regulated industry.
At O’Reilly Law Group, we are knowledgeable in business law and have vast experience in law and business that includes service as CEO of a New York Stock Exchange company and on the boards of prominent companies. We have the experience and know-how to help guide your business through this crisis that is affecting all of us. Call O’Reilly Law Group today at (702) 382-2500 or visit www.oreillylawgroup.com.