CEOs Shift Gears: In 2023 CEOs are now challenged to propel their companies forward without relying on government support such as EIDL, PPP, or ERTC.
In the wake of the global pandemic, CEOs worldwide have faced unprecedented challenges in steering their businesses towards stability and growth. Government stimulus programs, such as the Paycheck Protection Program (PPP), provided crucial support during the crisis.
However, as economies recover and new realities emerge, CEOs are recognizing the need to generate business independently, rather than relying solely on government aid. This article explores the changing landscape for CEOs, the strategies they are adopting to foster sustainable growth, and the importance of finding alternative funding sources for operations.
Adapting to New Realities
The COVID-19 pandemic disrupted industries, supply chains, and consumer behavior, leaving CEOs with no choice but to pivot their strategies rapidly. With vaccination efforts underway and economies reopening, CEOs found themselves grappling with a new set of challenges.
While PPP loans provided a lifeline in the early stages, it’s important to note that they were designed as temporary measures. Similar to PPP, Economic Injury Disaster Loans (EIDL) and Employee Retention Tax Credit (ERTC) also served as government assistance during the crisis. However, companies are now shifting their focus towards long-term resilience, as they recognize the limitations of relying solely on these forms of government assistance.
What We’re Hearing from CEOs:
- “Time to roll your sleeves up”
- “Riding the wave and rolling with the punches”
- “I’m back to a full-time job”
At EFFI, we have the privilege of working closely with and communicating with fellow CEOs on a daily basis. Lately, we’ve noticed a growing trend among them: a return to the basics.
With the pandemic gradually becoming a thing of the past, CEOs are eager to explore ways to strengthen their companies for the future. They are asking important questions like, “How can we build resilience and be proactive in safeguarding our businesses from future disasters?” and “What strategies can we employ to generate growth?
These discussions reflect their determination to navigate the ever-changing landscape and ensure a prosperous future for their organizations.
Strategies for Generating Business
Successful CEOs grasp the significance of diversifying revenue streams, exploring novel opportunities, and actively pursuing independent business generation beyond government support. Alongside these efforts, they must also secure funding for their operations. This involves exploring finance options outside the framework of government assistance, such as:
Business leaders reach out to financial institutions to secure loans for their operations. They present their historical financials, projections, and demonstrate their ability to repay the loan, thereby accessing the necessary funds for continued operations and growth. There are different options for CEOs to consider:
- Equipment Finance
- Cash-out finance
- Refinance debt and reduce monthly payment
- Working capital advance
2. Private Equity
CEOs are engaging with venture capital firms and private equity investors to secure funding. These investors provide capital in exchange for equity or a share in future profits, enabling CEOs to fuel growth and expand their business operations.
3. Trade Credit and Supplier Financing
CEOs negotiate favorable payment terms with suppliers, such as extended credit periods or supplier financing arrangements. This approach allows CEOs to manage cash flow efficiently and allocate resources to other critical areas of business growth.
Building Resilience and Risk Management
While generating business independently and securing funding are essential, CEOs also understand the importance of building resilience and effective risk management frameworks. They work closely with sales, finance and operations teams to:
1. Create Financial Contingency Plans
CEOs develop robust contingency plans that account for potential risks and uncertainties. These plans outline strategies to mitigate financial challenges, ensuring the continuity of operations even in adverse circumstances.
2. Data Visibility of Revenue Slippage to Sales & Marketing
CEOs proactively explore opportunities to diversify revenue streams, reducing reliance on any single source of income and also share specifics for the actual data of account success, revenue, and profit. This approach helps to spread knowledge of the actual data and metrics of what revenue slippage. This provides proof to the sales team which will promote a change in behavior.
3. Market Facing + Team Facing Actives
CEOs prioritize investment in market-facing actives, such as client meetings, impactful presentations, and strengthening sales, marketing, and operations teams. Modern financial management tools and technologies to streamline operations are great, yet there is nothing like leadership attention and involvement in the work.
By implementing these practices, CEOs can enhance cash flow management, optimize financial decision-making, and ultimately drive favorable outcomes for the business. These systems empower CEOs to make well-informed financial choices that align with business growth objectives.
Ready to Build
The post-pandemic era has compelled CEOs to revolutionize their approach towards business development and funding procurement. Although government support programs like PPP, EIDL, and ERTC played a critical role during the crisis, CEOs now acknowledge the imperative of assuming responsibility for their organizations’ independent growth. Contact EFFI to discuss how we can help you build resiliency and structure for growth of your business.
By embracing innovative strategies, CEOs can effectively navigate the ever-evolving business landscape. With resilience and efficient financial practices, they can secure operational funding and reignite the entrepreneurial spirit reminiscent of the early days of business building.