How Local Manufacturers Maneuvered During Covid-19
As our region and our state is currently moving back to a new normal, business leaders are faced with a new set of challenges and a broad spectrum of unknowns. What has become painfully obvious is that many pre-COVID-19 strategies do not apply now, predictions on future events are hopelessly flawed, and there is little expertise on how to proceed. Even our legal and medical systems have overturned past precedents and are implementing new remedies and generating corrections from user feedback. Taking a best guess, using collective wisdom, and learning from failures has become the new norm for COVID-19 crisis management.
May Survey Summary
The Manufacturing Alliance of Bucks & Montgomery Counties and the statewide SEWN organization, launched a quick snap-shot survey of business leaders across the state. We received 173 responses, and while a small segment, the survey showed 74% of those responding have been open the entire time and an additional 16% have been open most of the time. The feedback from these veterans of COVID-19 crisis management provides us with some helpful insights and a couple of troubling issues on the horizon. Click on the infographic for a quick overview.
The survey highlights are as follows:
88% figured out how to get enough PPE supplies to provide for their entire workforce
96% figured out how to make COVID-19 regulation accommodations with little or no difficulty
79% managed to keep at least 80% of their workforce on the job during the entire crisis
71% received a Payroll Protection Plan (PPP) grant
49% said they can meet the grant forgiveness workforce level requirements; 46% not sure
46% can meet the spending timelines; 36% more said yes if the timeline is extended
When asked to project how their businesses would look after the government support ended, only one owner said they would close their company. However, 42% said they would have to restructure or redefine their business to meet new marketplace demands.
When asked to project their level of operating cash on July 1, 2020, 49% of the companies said they were looking good. However, 36% said they were tentative and 15% said they don’t have enough.
Taking the projection step to another area, we asked the owners to share their sales backlog status for June. The feedback highlights an immediate challenge:
22% are above forecast
29% are below by 0-15%
25% are below by 16-30%
24% are below by +30%
Extending that same sales backlog status request to the remainder of 2020, the feedback was:
25% project to end the year above forecast
59% said they will continue to trend down
16% said the rest of the year is looking bleak
Finally, we asked the owners to project how COVID-19 related costs would affect their 2020 profit level.
24% said they could offset the added costs and will finish better than forecast
46% said added COVID-19 costs will reduce profits by 1-25%
19% said a 26-50% profit reduction will occur
17% said profits would be down by over 50%
Building off the theme of learning from businesses that have traveled the COVID-19 crisis journey, we are developing a series of company success and failure stories. Our goal is to provide examples so that business leaders can apply these nuggets of knowledge to their own individual situations.