COVID-19, PPP and Navigating Turbulent Times

Before I had sold my language services company, Advanced Language Translation, in 2015–a company I had founded in 1994 while still in my twenties (barely) from my basement with a baby on the way (and a fearless wife)–I and my company had weathered no fewer than three recessions. First was the “Dot-com Bubble” around the turn of the millennium. Then came the post-9/11 recession. And, then the one none us will soon forget, “The Great Recession” of 2008. That last one left quite a mark. Throughout fall of 2008 and through all of 2009, my staff and I wrote enough quotes to cover nearly two years of sales, and our win rate was nearly zero. (Thanks to a base of wonderful repeat customers, we usually enjoyed a 75% conversion rate on quotes). It didn’t take more than a few weeks into the first quarter of 2009 to know that we had tough times ahead.

Back then there were no bailouts for the small companies. There was just no capital to go around. The federal government had to give it all to Wall Street and bail out the flagging auto-industry. Now, the economic shutdown by COVID-19 is all-encompassing and requires that the U.S. government help all businesses. There was no Cares Act or PPP back in 2008.

My biggest fight back then was to maintain headcount. My staff were all highly trained and could not easily be replaced if I had to carry out layoffs. I fought hard to keep everyone busy and employed, which meant tapping out credit lines and bringing in as much work as we could under the circumstances. We hung on and 2010 turned out to be our biggest year ever. (Most of those latent quotes finally got approved, just 12 – 18 months later than normal). We survived, but a big debt load and limited capital to undertake future expansion pointed me towards the exit.

So, why the war story? Perhaps I’m just making lemonade. But compared to the Great Recession, the one we are facing now has a completely different dynamic…

The 2008 meltdown was at it’s core a lending crisis. The situation now is quite different. Banks are in relatively good shape (you’ve got to remember, banks arose during the time of plague in Europe, they are designed to protect assets in this type of situation). There will still be good, cheap capital to help businesses weather tough times.
The government is disseminating funds to all sectors of the economy, including small businesses, which make up most of the language services industry.
This crisis is causing great pent-up demand, which will result in a major economic boon–once the crisis has past.
Global trade while curtailed drastically is still limping along, since so many goods are essential to daily life. This means that our industry’s clients are still working and still need language services.
While hurting some service types, such as in-person interpreting, other services have functioned as a substitute such as OPI (over-the-phone interpreting) and VRI (video remote interpreting).
For some service providers, corporate communications business has increased, with many clients having to publish policies about COVID-19, remote work, shutdowns, scheduling, etc.

But, one of the brightest spots I’ve experienced in the last few weeks was the collaboration of members of the Association of Language Companies, who worked tirelessly throughout the week helping each other navigate the byzantine, confusing, and ambiguous process which was the PPP rollout. Through this collaboration, by week’s end some members had already begun getting approvals for PPP loans. Here were a bunch of “competitors” pooling resources and knowledge to give each other an edge in competitive market place. That’s making some serious lemonade!

Don’t retreat too much in this time of crisis. With some extra discretionary time, it’s a perfect opportunity to review your strategy and tackle those items on your management to-do list. You know, the “only-if” things that could make your more efficient, competitive, and profitable. Take a moment and shoot me message to setup a no-obligation call. Stay well!