Top 5 Things You Need to Consider Before Reopening With Drew Niehaus - [CFO Weekly] Episode 8

March 17, 2022 Mimi Torrington

Come in we're open sign hanging on business door

This week's topic: Things You Need To Consider Before Reopening.

Let’s face it: It’s a hard time for any business. So many institutions across the country are finding themselves staring at closing up shop permanently.

And for those that are lucky enough to make it through all of this, they’re left asking the question, “What do we do now?”

It’s a fair question. What does it look like to reopen? What does the new normal look like? What unique challenges are you going to face that you’ve perhaps not considered?

On this episode of the CFO Weekly podcast, we sit down with Drew Niehaus, Managing Director at Riveron to discuss an article that he recently wrote for CFO.com around Five Accounting and Reporting Considerations you should evaluate before reopening.

Consideration #1: Forecasts

Coronavirus turned forecasts upside down

If your forecast blew up in your face in March, know that you’re not alone. COVID-19 turned everybody’s forecasting model upside down.

“The coronavirus turned every forecasting model upside down. No one is going to be creating a perfect forecast in this environment,” Niehaus said.

But saying, “Well, our forecast model exploded” is only going to get you so far. So how do you focus on forecasting in this current environment? First off, focus on the rest of the year, and broaden the scope of information you use to forecast.

You’re not going to be able to use the same static data sets that you’ve used in the past. There’s new information specific to COVID-19 that is going to be added to the equation.

How’s the virus spreading? How are governments reacting? What does this all mean for production, capacity, and demand?

Consideration #2: Divestitures

What to consider before reopening business after coronavirus

Whether we want to admit it or not, now is going to be a time when CFOs are likely going to be looking to shed under-performing asses.

These are never easy decisions to make or discussions to have, but now more than ever, it’s important to have a solid de-integration plan for your businesses and assets.

“In an environment where these types of deals are going to be increasing in volume, it's even more important to develop a robust de-integration plan,” Niehaus said.

While you obviously need to know what to get rid of, an upfront plan also needs to include a core analysis of divesting and using proceeds to invest strategically into the appropriate future growth plan. Second is a value analysis.

Is the business worth more to your company than anyone else in the marketplace? You want to have a solid answer to that question before you go through the arduous process of selling off an asset.

Consideration #3: Real Estate Expenses

If COVID-19 has shown us anything, itts’ that far more work can be done remotely than we ever thought possible before.

Maybe it’s time to look at your real estate footprint. Could you be doing the work with only 20% of the workforce in the office? 50%?

While you may not want to do away with the office entirely, it’s worth asking yourself questions around leases (are the lease break fees less than what you’d save by downsizing?) or technology (what sorts of investments would you need to make to get everybody set up for success at home?)

As finance and organization leaders think through real estate changes, they should definitely factor in these types of mitigating costs.

Consideration #4: Inventory Management

COVID-19 messed up the supply chain. Remember back in March when going to the store for toilet paper seemed like an impossible task?

How are supply chain changes going to impact your business?

It may mean moving away from a single supplier (which would likely result in higher costs due to not buying in as large quantities.)

Or moving away from just-in-time inventory management (which again, would result in an increase in inventory balances and negatively impact cash flow.)

Consideration #5: One-Time Costs

Whether it’s severance costs or contract cancelations, reopening and navigating your business in this COVID-19 world is going to come with unexpected one-time costs.

Though some of these seemingly one-time costs may end up being normal costs for your business (think cleaning supplies to maintain a sanitized office. You’re not going to be doing away with those any time soon.)

However, you end up reopening, make sure you’re taking into consideration all of the crucial decision points so that you can do it safely, and in a way that causes minimal disruption to your business and your employees.


This post - Top 5 Things You Need To Consider Before Reopening - is based on a CFO Weekly podcast with Drew Niehaus. To hear this episode, and many more like it, you can subscribe to our show on Apple.

If you don’t use Apple Podcasts, you can go to Spotify or your favorite podcast player!

Previous Article
Should I Switch BPO Providers? When to Stick and When to Switch
Should I Switch BPO Providers? When to Stick and When to Switch

Choosing a BPO provider can be a tough decision, and once it’s done, many companies want to stick with thei...

Next Article
When Should a Company Outsource? How to Decide What Time Is the Right Time
When Should a Company Outsource? How to Decide What Time Is the Right Time

Decision made, your organization needs to outsource. But when exactly should a company outsource? discover ...