Ep. 78: Heather Bain - Survival Strategies for Small Businesses
Heather Bain, CMA, MBA, and CPA, Committee Chair of IMA’s Small Business Committee (SBC), and Owner of Bain CPA Business Strategies, LLC. joins Count Me In to talk about what small and medium size businesses can do during this time of crisis. Heather has experience in numerous industries including oil and gas, real estate, human resources, computer technology and training. She has served Houston area entrepreneurs as a business plan adviser for the Business Plan Competition held each year by NewSpring and Houston Community College. She is well versed in various strategies businesses can follow to ensure their success in continuing operations. Listen in to hear more about business planning and continuity, emergency response and recovery plans, and structured steps to "weather the storm".
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 a customer has a new need that the company can meet, then if there's clear two way communication between the company leaders and the employees on the front line, dealing with the customer directly, then there's an opportunity to service that new need and create a new revenue stream. So it's very important that the customer and employee and the leaders are all communicating clearly about needs, about ability to meet the needs, and the same thing is true with vendors. When a vendor can't meet a need, it's good for the leaders of the organization to be able to clearly communicate with, with the vendors as well. So everyone involved needs to be engaged in two way communication, rather than the leaders just pushing information down through the organization without getting feedback from all levels of the organization and all of the outside influences and relationships that they have. Does that answer your question?
Rouba: (10:54)
Yes, absolutely, and these are very constructive and helpful steps. I'm sure that a lot of leaders in the SME segment would really benefit from this and we will provide the link so that they could, you know, read through this, a bit more in detail. You have extensive expertise in numerous industries. I mean, you've gone through oil and gas, real estate, human resources, computer and technology, and training. In your experience, should SMEs be hopeful? I mean, can they be hopeful? Can they survive this pandemic and come out of it as ambitious and capable as they once were?
Heather: (11:29)
Yes, they can assuming that they create a plan as early as possible. Assuming that they are, that they are in their rational mind, then they actually can come out stronger. They will have setbacks. Every organization I've interacted with since the beginning of March has indicated that they've definitely had setbacks. They've had interruptions in cashflow and limitations on some of their resources, but many of them are very hopeful that they can create a plan, and that once we're past this, they will actually be a more dynamic organization and able to respond to future disruptions in their business.
Rouba: (12:20)
You consult for, for various companies perhaps more so at present than ever. At a time when your guidance is crucial. Are you finding that some companies are doing better than others? And what are the reasons behind that? Is it because of their industry? Is it because of strategy? Is it agility? And what are some of the qualities that you find are fundamental to survival at this kind of time?
Heather: (12:45)
Well, the businesses that are doing better than others are the ones that are the most creative. They've created a plan and they're executing the plan to meet the new needs. They understand that we're in an age of a new normal. Things are, are evolving, and many of these companies are just not looking back at the past saying, this is the way we've always done it. They're looking forward and saying, we are going to build a new business model. We'll address new needs of our customers and we'll deliver our services in whatever mode we're allowed to and keep as many of our employees and vendors as possible. So many of the companies that I've worked with have shifted over to a more, COVID oriented business. For instance, I know of a company that shifted from a small manufacturing company to a much larger one, simply by, by offering a COVID face shield because they were in a, they were in a market that would allow them to manufacture these face shields and they already had the facilities to do it. They just said, okay, well, this is where the need is right now. This is how we'll meet that need, and they were actually able to increase their workforce during this time. So they, they positioned themselves to look forward rather than just shutting their doors and saying, well, there's no market for what we offer right now. The same thing was true with an exercise clothing manufacturer, they cut up all of their t-shirts and made masks out of them. And then we're selling them to hospitals because the hospitals were short of masks, and this is a special fabric that is antibacterial. So it can be washed over and over and doesn't collect bacteria, and it was really a unique selling point for this particular company. And they they've been able to actually increase their, their sales during this time, rather than decrease their sales. Obviously technology companies can increase, and biotechnology companies can increase their sales as well because globally we're all looking for better technology, and those of us who are quarantined are very interested in any way that we can communicate better with the people we can't see face to face. So all of these emerging markets are opportunities for businesses to shift their business model and their service offerings to actually improve their quality of service and their, their revenue stream and survive through this time.
Closing: (15:54)
This has been Count Me In IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.
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 a customer has a new need that the company can meet, then if there's clear two way communication between the company leaders and the employees on the front line, dealing with the customer directly, then there's an opportunity to service that new need and create a new revenue stream. So it's very important that the customer and employee and the leaders are all communicating clearly about needs, about ability to meet the needs, and the same thing is true with vendors. When a vendor can't meet a need, it's good for the leaders of the organization to be able to clearly communicate with, with the vendors as well. So everyone involved needs to be engaged in two way communication, rather than the leaders just pushing information down through the organization without getting feedback from all levels of the organization and all of the outside influences and relationships that they have. Does that answer your question?
Rouba: (10:54)
Yes, absolutely, and these are very constructive and helpful steps. I'm sure that a lot of leaders in the SME segment would really benefit from this and we will provide the link so that they could, you know, read through this, a bit more in detail. You have extensive expertise in numerous industries. I mean, you've gone through oil and gas, real estate, human resources, computer and technology, and training. In your experience, should SMEs be hopeful? I mean, can they be hopeful? Can they survive this pandemic and come out of it as ambitious and capable as they once were?
Heather: (11:29)
Yes, they can assuming that they create a plan as early as possible. Assuming that they are, that they are in their rational mind, then they actually can come out stronger. They will have setbacks. Every organization I've interacted with since the beginning of March has indicated that they've definitely had setbacks. They've had interruptions in cashflow and limitations on some of their resources, but many of them are very hopeful that they can create a plan, and that once we're past this, they will actually be a more dynamic organization and able to respond to future disruptions in their business.
Rouba: (12:20)
You consult for, for various companies perhaps more so at present than ever. At a time when your guidance is crucial. Are you finding that some companies are doing better than others? And what are the reasons behind that? Is it because of their industry? Is it because of strategy? Is it agility? And what are some of the qualities that you find are fundamental to survival at this kind of time?
Heather: (12:45)
Well, the businesses that are doing better than others are the ones that are the most creative. They've created a plan and they're executing the plan to meet the new needs. They understand that we're in an age of a new normal. Things are, are evolving, and many of these companies are just not looking back at the past saying, this is the way we've always done it. They're looking forward and saying, we are going to build a new business model. We'll address new needs of our customers and we'll deliver our services in whatever mode we're allowed to and keep as many of our employees and vendors as possible. So many of the companies that I've worked with have shifted over to a more, COVID oriented business. For instance, I know of a company that shifted from a small manufacturing company to a much larger one, simply by, by offering a COVID face shield because they were in a, they were in a market that would allow them to manufacture these face shields and they already had the facilities to do it. They just said, okay, well, this is where the need is right now. This is how we'll meet that need, and they were actually able to increase their workforce during this time. So they, they positioned themselves to look forward rather than just shutting their doors and saying, well, there's no market for what we offer right now. The same thing was true with an exercise clothing manufacturer, they cut up all of their t-shirts and made masks out of them. And then we're selling them to hospitals because the hospitals were short of masks, and this is a special fabric that is antibacterial. So it can be washed over and over and doesn't collect bacteria, and it was really a unique selling point for this particular company. And they they've been able to actually increase their, their sales during this time, rather than decrease their sales. Obviously technology companies can increase, and biotechnology companies can increase their sales as well because globally we're all looking for better technology, and those of us who are quarantined are very interested in any way that we can communicate better with the people we can't see face to face. So all of these emerging markets are opportunities for businesses to shift their business model and their service offerings to actually improve their quality of service and their, their revenue stream and survive through this time.
Closing: (15:54)
This has been Count Me In IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.
