Posts tagged with "Forbes Business Council"

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The Business Comeback After COVID-19

Business Turnaround Expert Cites Keys to a COVID-19 Comeback

By Merilee Kern, MBA ‘The Luxe List’ Executive Editor

The September 11th attacks. The Great Recession. The COVID-19 pandemic.

All three of these seismic and tragic events have resulted in heartbreak to humanity, including loss of life and our emotional well-being – both individually and collectively. Of course, accompanying these global crises were monetary meltdowns reminiscent of the Great Depression that commenced in 1929 and lingered until the late 1930s.

After a “relatively” calm 70 years, the United States economy has suffered three devastating developments inside the last two decades, alone. There have been wars fought throughout the world and inflation escalations along the way, to be sure, but the start to the 21st century has suffered escalating and unusually concentrated economic calamities – some that have profoundly altered the very fabric of our lives, both personally and professionally.

Indeed, on the business front, such periods have been among the most – perhaps the unequivocal most – trying of times. Amid current circumstances as the coronavirus rages on around the globe, I recently connected with internationally-renowned business restructuring executive James “Jim” Martin, founder of ACM Capital Partners with offices in Charlotte, Denver and Miami. Having spent the last three decades leading international middle-market companies through periods of distress and transition to actualize stability and growth, Martin is uniquely well-positioned to share insights on how business can rally to best assure a “COVID comeback.” Here’s what he had to say.

MK: First, before addressing the current coronavirus situation, what can you tell us about how you’ve helped companies navigate previous “rough waters?”

JM: Relative to the September 11th attacks back in 2001, I’ll share a representative example of a strategic pivot that didn’t just help a company survive, but actually drove profit. After that horrendous event, I stepped in to assist a large aviation maintenance repair-and-overhaul facility whose revenue had been cut fully in half immediately following the attacks – the result of many carriers permanently parking older aircraft (including the 727 fleet). The sizable challenge presented was to maintain a 1000-person labor force while allowing the industry the necessary time to recover. To do so, we created a captive subcontracting company to which we transferred one-third of our labor force. During our troughs, we contracted this labor to our competitors and, during peak periods, we utilized this labor for ourselves. Thus, not only were we able to retain our skilled, well-oriented labor force during the recovery, but that very staff actually provided additional, supplemental profit. The end result was that we sold the business for $138 million, which provided our new investors with a 33 percent internal rate of return (IRR).

Less than a decade after 9/11, amid The Great Recession in 2008, I entered another industry that proved to be among the most brutalized by a global economic downturn: automotive supply. My client was a key supplier to the “Big 3” U.S. auto manufacturers.

At the start of 2008, the industry forecast was the production of 18 million vehicles in North America. Come summer, however, it was clear the automakers would not come near reaching that forecast due to the financial crisis. This did not come as a complete surprise to us, though, because – amid our firm’s protocols – we had had already fully immersed ourselves in our client’s industry and employed forecasting tools alerting us of trends … this one in the wrong direction. So, we were privy to the situation well before management and others within the industry. By late June 2008, we instituted cost-cutting maneuvers and furloughs that enabled the company to withstand the industry’s brutal second half of ’08 that would result in two of the “Big 3” automakers filing for Chapter 11. Despite the industry producing less than half – as much as eight million – of its original vehicle-production forecast, our client not only survived, but ultimately grew and prospered.

MK: Turning attentions to COVID-19, what do you feel is integral for businesses to survive and recover?

JM: For businesses to recover from the coronavirus shutdown, it’s going to take a two-pronged approach: both financial and human capital. Starting with the financial, it will be a “loan-ly” world for those not well-versed in the intricacies of SBA, PPP and other “economic disaster” lending. Consider how expeditiously those programs were rolled out. Then consider how even more quickly they were scooped up. Did anyone really read those loan documents in full, or even halfway through, initially – or even to this day?

My guess is at least half of the companies receiving COVID-related loans took a very “CliffsNotes” approach to these agreements. The result is there’s a solid chance funds were used incorrectly, which is going to make a lot of the loans, shall we say, less “forgivable.” For example, if your company’s payroll roster is shorter today than it was pre-virus, the portion of the loans forgiven is likely to be less.

And while your mind may rush to claiming ignorance and throwing yourself upon the mercy of the government to which you already pay taxes, realize that third-party capital is likely to participate in this market through securitization. This means that thousands of SBA loans could be bought, then packaged to be sold to the secondary market, at a discounted rate, no less. If this happens, understand that the purchasers will have the full intention of holding their borrowers (i.e. small business owners) to paying back 100 cents on the dollar.

So, those companies who received loans and are required, but unable, to pay them back in full may be exposed to either foreclosure or, worse, a “loan to own” scenario. In other words, much like the agreement that comes with your big-tech user agreements, like those prompting users to “click agree,” the fine print matters.

What this means to recovery is that, once again, cash is king: gather it, preserve it, cease lines of credit, liquidate what you can, negotiate costs down with suppliers. If you’re struggling to pay you suppliers, you can look into purchase order financing options in order to improve your cash flow. And if your company had a healthy bottom line pre-COVID, than a professional familiar with these trenches can help you look to refinance or bring in equity.

With all of that said, the key to a COVID-19 recovery is going to be adhering to the rules of a lender’s road, as well as the ability to navigate the red tape when you veer off that road. If you have read all the fine print and properly managed your loan, congratulations! You’ve acquired some really cheap capital. For those who didn’t do their research, however, this road to recovery likely will need some paving.

MK: What about the human capital you mentioned?

JM: Yes, and then we arrive at the human capital. Lots of companies today are excessively top-heavy. Remember the part about removing emotions from this process? Companies that quickly recognize cuts need to be made will be better positioned to recover than those who dawdle. Again, compiling and preserving cash is going to best position a business for recovery.

This is an instance where it’s especially beneficial to know when to pull triggers (best if earlier than others) and to make decisions that are not based on emotions—a tall order for many CEOs, which is why many turn to turnaround experts. However it’s undertaken, what’s certain is that reducing human capital is painful, but it is also often necessary and almost always beneficial.

The upside is that, when the virus no longer exits, businesses can already be well-positioned for a fairly quick recovery. Maybe not v-shaped sans a vaccine, but quick relatively speaking due to the downturn having been so specific to one singular causing factor.

MK: Tell us a bit about your role as – and general value of – a turnaround expert when turmoil strikes a business.

JM: During times of difficulty, owners and executives can greatly benefit from specialized knowledge that’ll help them best navigate those unchartered waters that are often entangled in a lot of red tape. So, turnaround experts bring to the table a litany of tried-and-true “been there, weathered that” experience and expertise. There’s simply no substitute for engaging with a partner whose entire mandate is ensuring your company’s survival and success during some of the most grim and challenging times it might experience – those professionals who are willing to spend sleepless nights figuring out how to ensure the company meets payroll; who’ll work around the clock to keep the company’s doors open; and who can tackle challenges without being hindered by emotions that understandably weigh on a business owner or manager. It takes this kind of specialized expertise, experience and grit to lead companies through periods of distress and transition, to stability and growth.

No stranger to corporate chaos, during Martin’s own three decades as a globally-regarded turnaround expert, he has reportedly created and restored nearly $1.5 billion in value to lower middle-market companies; raised an additional $1 billion in capital; and managed mergers and acquisitions in excess of $500 million – all collectively representing his company restructuring portfolio valuation in excess of $3 billion.

Today, as the coronavirus continues to wreak havoc on business operations far and wide, take heed that there are various key strategic and creative tactics that can help businesses not only weather the storm, but even emerge stronger and more financially secure on the other side.

About Merilee Kern:

Forbes Business Council Member Merilee Kern, MBA is an internationally-regarded brand analyst, strategist and futurist who reports on noteworthy industry change makers, movers, shakers and innovators across all categories, both B2C and B2B. This includes field experts and thought leaders, brands, products, services, destinations and events. Merilee is Founder, Executive Editor and Producer of “The Luxe List” as well as Host of the nationally-syndicated “Savvy Living” TV show. As a prolific consumer and business trends, lifestyle and leisure industry voice of authority and tastemaker, she keeps her finger on the pulse of the marketplace in search of new and innovative must-haves and exemplary experiences at all price points, from the affordable to the extreme. Her work reaches multi-millions worldwide via broadcast TV (her own shows and copious others on which she appears) as well as a myriad of print and online publications. You can connect with Merilee at www.TheLuxeList.com and www.SavvyLiving.tv

Follow Merilee Kern:  Instagram | Twitter | Facebook | LinkedIN

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Merilee Kern on Q-Reel Tech

By Merilee A. Kern, MBA

Recent reports indicate there are over 5.6 million electric vehicles (EVs) worldwide, representing a full 64 percent increase from the same time period in 2018—and the second consecutive record growth year in the zero-emissions transport market. With this progression comes commensurate concern over inadequate public EV charging infrastructure. So, it’s not surprising that the Department of Energy (DOE) indicates drivers do more than 80 percent of their EV automobile charging at home. However, even amid the extreme conveniences of doing so at-home, a multitude of safety, technological and affordability problems persist.

As one case in point, the DOE underscores a problem for Level 1 or 2 EVSE home charging, advising that consumers “should store the charging cord securely so it is not damaged,” indicating possible scenarios that may put charging cables and cords at risk of suffering abuse like “being run over by a car.” Other more ominous reports indicate that drivers charging vehicles at home are taking dangerous risks relating to electrocution and fire like “‘daisy-chaining’—using multiple extension leads plugged into one another—to reach their car.”

That report also highlights a survey among electric vehicle owners—including both all-electric and hybrids—finding that the vast majority (a whopping 74 percent) of respondents admit to using “domestic multi-socket extension leads, not suitable for outdoor use, to charge from the mains in their home. This is despite almost nine out of 10 respondents admitting they were aware these should not be used outdoors.” It goes on to reveal that “over half of electric vehicle users who charge using an extension lead, meanwhile, said they had left cables running to their vehicle in the rain.” 

Explosion and the leakage of electrolyte chemicals from batteries are among other reported EV charging perils beyond electrocution and fire. Further exacerbating fears, GreenCarReports.com published eye-opening revelations that “not every home charging station on sale in the U.S. has received third-party safety certification,” and that “many charging stations sold on Amazon are not safety tested,” according to a recent investigation by Charged EVs.

These and other serious consumer hazards, coupled with a desire to generally maximize the convenience and efficacy around home EV charging, have inspired extreme innovation from Q-Reel—a smart-charging company that’s developed the world’s first semi-automatic AC charging station for EVs. Q-Reel is poised to offer global consumers intuitive and effortless charging at home with a first-of-its-kind automated ejection system ensuring a hassle-free, hands-free charging experience. This in conjunction with the associated user-friendly smartphone app and built-in camera function, allowing users to monitor their EV inside and out with a simple swipe of a button.

Helmed by a team of Dutch entrepreneurs and engineers, the soon-to-launch Q-Reel solution presents an array of key features and benefits that will result in extreme lifestyle enhancements for EV owners. Highlights include:

    • Enhanced Safety & Equipment Integrity: Retractable cables best ensure that they will not suffer damage or abuse when not in use, while also protecting these parts from rain, humidity and other external elements. Q-Reel also reduces risk of electrocution and fire, thus upholding homeowner and property safety, since the fully third-party safety tested and certified system serves as an appropriate power source. It eliminates any cause to use the main home electricity source with or without extension cords/leads (or a daisy chain thereof)—especially those wires not suited for outside environments. Additionally, the flat cable inside the Q-Reel has enough cooling surface to prevent it from overheating and comes with a thermometer to regulate its temperature.    
    • Power-Assisted Operation: Q-Reel takes care of the ‘heavy lifting’ with regards to cable weight with its innovative automated ejection system that disconnects the plug from the car inlet and automatically retracts the cable directly back to the charging station to ensure hassle-free operation.
    • Effortless Charging: Simply grab the plug and connect it to the vehicle charging port and Q-Reel will take care of the rest. Thanks to a proprietary, leading-edge automatic ejection technology, it’s ready to go when you need it.
    • App-Based Monitoring and Control: Q-Reel works with an intuitive mobile app (iOS and Android) that lets users personalize charging time preferences at the swipe of a button. In addition to optimizing the charge process, users can also use the app interface to view live footage from Q-Reel’s built-in camera right from a smartphone.
    • Customizable Display: Q-Reel features a customizable display that offers various personalization options. This makes it possible to add a house number, corporate logo or any other design, if desired.

“In pioneering a superior EV experience from the consumer’s perspective, Q-Reel intends to markedly stimulate widespread EV ownership and adaptation worldwide by easing and enhancing key home charger marketplace concerns relating to safety, usability and affordability,” said Astrid Peters, CEO of Q-Reel. “In removing distinct obstacles around the often complicated and time-consuming traditional charging processes, we aim to help EV drivers everywhere charge their automobiles at their own home, without effort. Doing so will help lower the barrier-to-entry threshold, prompting more people to actually start driving electric.”

Founded in 2020 by a team of Dutch entrepreneurs and engineers, Q-Reel designs, develops and manufactures intelligent charging solutions for electric vehicles for both domestic and business use. With its at-home semi-automatic AC charging station, the company is on track to revolutionize the global EV charging landscape.

Sources:

https://thedriven.io/2019/02/13/there-are-now-5-6-million-electric-cars-on-the-road-up-64-from-last-year/

https://www.energy.gov/eere/electricvehicles/charging-home

https://www.theguardian.com/technology/2019/may/30/electric-vehicle-drivers-at-risk-by-charging-from-home-mains-supply

https://www.electrocuted.com/2016/11/28/electrocution-hazards-electric-cars/

https://www.greencarreports.com/news/1108817_electric-car-charging-station-safety-what-you-need-to-know 

https://chargedevs.com/features/amazon-evse-safety/ 

About Merilee Kern

Forbes Business Council Member Merilee Kern, MBA is an internationally-regarded brand analyst, strategist and futurist who reports on noteworthy industry change makers, movers, shakers and innovators across all B2B and B2C categories. This includes field experts and thought leaders, brands, products, services, destinations and events. Merilee is Founder, Executive Editor and Producer of “The Luxe List” as well as Host of the nationally-syndicated “Savvy Living TV show. As a prolific business and consumer trends, lifestyle and leisure industry voice of authority and tastemaker, she keeps her finger on the pulse of the marketplace in search of new and innovative must-haves and exemplary experiences at all price points, from the affordable to the extreme—also delving into the minds behind the brands. Her work reaches multi-millions worldwide via broadcast TV (her own shows and copious others on which she appears) as well as a myriad of print and online publications. 

Follow Merilee Kern: www.TheLuxeList.comwww.SavvyLiving.tv | Instagram | Twitter | Facebook | LinkedIN.