Michael Bosma: Entrepreneurial wins in the face of COVID adversity (Voices)
Covering Your Assets
I actually had a plan for this column. I was going to write an article that walked business owners step by step on re-opening their businesses in concert with Governor Sisolak’s lifting of the various closures across the state. Genius!
However, for those readers who watched the governor lay out his “game-plan” for re-opening the state on April 21 — without definitive timelines — it basically made my great strategy about as useful as the governor’s plan to open the state.
Both destined for the shred box.
Instead, I would share some anecdotal evidence of various entrepreneurial “wins” in the face of catastrophe.
Win No. 1 – Court Cardinal, General Manager, Casino Fandango
Court was a guest on the April 18th installment of Bosma on Business (shameless plug alert, it airs Saturday at 10 a.m. on Newstalk 780 KOH).
On the surface, Court did not have much to be “happy” about. When Gov. Sisolak closed all casinos in Nevada, Clark had 6 hours to lay-off 400-plus employees, secure the gaming devices, etc., at his Carson City casino.
The day before banks began taking Paycheck Protection Plan (PPP) applications, the U.S. Treasury issued guidance that casinos were ineligible to receive the loans/grants. No government bailout for casinos!
Court’s words when I asked him about the lack of PPP funds were, to paraphrase, “As soon as it wasn’t an option, we looked for other ways to fund the business. Not even worth talking about.”
I love Court’s entrepreneurial grit. In the face of adversity, he made a pivot. He said he is now doing remodeling in areas that normally would be impossible for a building that is in use 24/7/365. He is making lemonade out of lemons!
As I ponder the dozens of businesses that I have counseled through the last five weeks, I marvel at the various levels of exasperation, shock, euphoria and a range of emotions in between. Entrepreneurs are a resilient lot.
Sadly, many businesses that have been institutions will seemingly evaporate overnight. The hope for tomorrow is that the ashes of a shuttered business will become the fertile soil for a budding entrepreneur in which to take root.
Sadly, too, is that for many, the relatively random selection of businesses deemed “essential” — coupled with the random way that funds were distributed through the PPP process — leave many entrepreneurs wondering if they will be reduced to ashes in seemingly random fashion.
Win No. 2 – Joe Dutra, President, Kimmie Candy Company
Years ago, Joe shared on my radio show that when he was 30, his business failed. He ended up broke and living back with his parents, sleeping on their couch.
I remember that many who heard the show commented that Joe seemed so successful and they couldn’t imagine he ever failed.
The truth is, we all fail — some in small doses, others in epic fashion. Joe reminded us that the current situation, while difficult, is merely preparing us for our next big thing.
Win No. 3 – Blake Smith, CEO, S3 Development
Blake shared that when the Great Recession of 2008 took out his business (think Somersett), he had to un-wind millions of dollars of debt — some, no doubt, with personal guarantees, etc.
When I asked how working with the various lenders worked out, he said, “I am still working with those that worked with me.”
It’s a good reminder that we are all doing the best we can, and trying to find a way through this mess.
Think about the key relationships you want tomorrow, and press into those people. Everybody wants to be your friend when things are great. Loyalty is forged in the fire of trials.
In conclusion, I encourage readers to take a moment and reflect on your current state. Do you see lemons, or ingredients to make lemonade? If you find yourself at the end of your rope, and ready to get off the business roller coaster, talk to your adviser team to find an exit.
Your business has value as a going concern, even if it is shuttered as a result of COVID-19.
Please note that this discussion is general in nature. Please consult with a CPA to get answers to your specific fact pattern.
Michael Bosma, CPA, is Principal-in-Charge of the Reno office of CliftonLarsonAllen LLP. His NNBW column, “Covering Your Assets,” focuses on effective planning strategies for every business owner. Reach him for comment at firstname.lastname@example.org.
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.