It’s a tough question: What should you do when a business you’ve worked with in the past posts a fund-raising campaign for its staff or operations on social media?
Or consider this one: How should you respond when a company asks its customers – which includes you – to purchase gift cards to help support it during the coronavirus outbreak?
These types of ethical questions are real, important and challenging for business owners of all sizes in light of how hard and fast COVID-19 has changed the world, said Patrick M. O’Keefe is the Founder and CEO of O’Keefe Consulting, which describes itself as “an expert hands-on consulting firm” based in Bloomfield Hills, Mich.
Currently, O’Keefe is working with companies on financial survival strategies that include operational review, proactive communications with lenders, vendors and suppliers and ways by which to best approach questions of staffing.
The answers aren’t easy, O’Keefe said. But the key message he is sending his clients and companies in general is to be conservative, conserve cash, and, most of all, respond quickly to customers and vendors who likely are wondering just as you are as to what’s next.
“It’s survival right now,” O’Keefe said. “Everybody is in the same boat. The ability to support other businesses is tough. There’s not really anybody that’s blossoming out there.”
Business to business
O’Keefe is recognized as an expert in the fields of strategic advisory services, corporate reorganization, debt restructuring, turnaround consulting, due diligence support, valuation and litigation support. For more than 30 years, O’Keefe has been active as a financial consultant and turnaround advisor to under-performing businesses in various industries including, retail, construction, automotive, manufacturing, and real estate, and has successfully completed assignments in out-of-court and Chapter 11 restructurings.
Moreover, O’Keefe is the CEO of Glycadia, a diabetes research company, and CEO of Grow Michigan, LLC, a junior lien lender supported by the State of Michigan Strategic Fund and 16 financial institutions to lend money to growing businesses.
While buying a gift card is a kind gesture, it may not be practical for business owners who are laying off employees or worrying about shutting down their businesses. But for those who can, it is important to maintain your company, check in on your employees and maintain contact with customers, who will likely be eager to return to normalcy once the pandemic has calmed, he said.
“You have to generate own liquidity (and) keep operation going. This is beyond serious. This is going to crush the middle markets and family businesses too. The government relief is not going to be enough, in my opinion, to make a big enough difference,” O’Keefe said. “We need to get back to work.”
O’Keefe recommends businesses tap into any programs available to them, such as grants and loans as well as government programs. He suggested owners reach out to customers – give people a reason to accelerate their payments.
In this situation, “the best thing to do is to communicate with your stakeholders on both sides of the fence, both who you owe and those that owe you. Where things get out of whack is when you don’t do what you can to the detriment of others,” O’Keefe said. “We tell clients: They really need to pull together a plan and communicate it quickly to all the stakeholders; generally, people will buy in.
“Uncertainty will drive a resolution,” O’Keefe added. “You need to come up with solutions.”
O’Keefe recalled a study he read that said when faced with the uncertainty of a 20 percent labor headcount reduction or a 20 percent reduction in pay, employees took the reduction in pay because they don’t have to worry about the uncertainty of being cut.
As the crisis subsides, O’Keefe said it will take weeks or months for business to ramp back up to previous levels. The consumer is likely to be conservative going forward, so companies will need to be patient.
“You could start opening up the showrooms and people won’t be likely to go out and purchase a big-ticket item right now. … People are going to hunker down for a while,” he predicted.
The bottom line, O’Keefe said, is to talk to your customers, your employees and your vendors.
“Communicate, communicate, communicate,” he said. “You’ve got to be proactive.”