Client Update: Planning in the Face of a Coming Stimulus Bill

Some good news, we have been incredibly encouraged this week and last. The teams we have met with are grounded, in good spirits and are demonstrating great leadership. A couple of things have stood out.

1) A plan helps a lot. I’ve talked to a lot of business owners over the last three weeks. Our clients with a strategic plan, even a plan that is undergoing revisions as we speak are handling this much better than other businesses who don’t have a plan. The mental clarity, reassurance and decision making ability provided by a plan cannot be replaced by anything else. And it’s not just numbers…your values, your vision, your why and your mission matter A LOT and they are helping businesses make important decisions.

2) Plans aren’t changing THAT much. No one is panicking. We don’t know what the next 2-4 weeks are going to be like so there’s no sense in going crazy. We are revising most revenue forecasts down. We are planning to make some tough decisions about payroll if things get a lot worse. But no one is closing up shop or running for the hills. We are going to adapt and adjust to this the same way we adjust to other challenges.

3) Leadership teams are killing it. It’s hard to tell you just how much all of us have been struck by the exemplary leadership we are seeing. It’s awesome!

About the stimulus bill:

A lot of clients are anxious to know if it can help and what is in it. WE DON”T KNOW YET. As of 5:15 today the full text isn’t available. Here’s what’s being reported by media who are getting a peek at it…

1. There will be a deferment of payroll taxes potentially for the rest of the year. I don’t think this is a good idea. Watch the video for an explanation.

2. There will be some kind of payroll tax credit for keeping payrolls level. We don’t know how much. We don’t know for how long.

3. There will be small business loans based on payroll. These are not a saving grace. Watch the video for more.

4. You can’t do the loans AND get the payroll tax credit.

5. It all appears to be short term. Nothing is meant to get you any farther than 6/30.

As soon as we get a look at the bill itself I will send out another update.

Our tune hasn’t changed. We need to make smart decisions assuming you won’t get anything from the federal government. This will bail out some industries like the airlines, but it CANNOT bail out the entire small business economy in the US. There is $300B set aside for small businesses (under 500 employees). There are 30 million of these businesses in the US. That’s $10,000 on average for every small business. We have to work our way through this and ADAPT and if we get help it’s gravy.