[COVID-19] How this Chartered Accountant and Founder of an Advisory and M&A Firm Manages Crisis

• Hello, I am Chandrashekar Kupperi, a Chartered Accountant, Cost Accountant, and Company Secretary by qualification. I am usually addressed as Shekar.
• I have almost two decades of experience in various multinationals with diversified sector experience—FMCG, life insurance, audit & assurance, and oil & gas.
• And having gained knowledge and expertise in M&A, I chose the entrepreneurial route, effective in 2013.
• I established an investment banking and advisory firm, “ANOVA Corporate Services Pvt. Ltd.,” focused on M&A and fundraising to support the MSME sector and startups.
• Clearly, COVID-19 has impacted MSMEs and large businesses alike, and nobody is spared!
• Here is how we are dealing with various challenges and how you can too!

Challenges and crises in business or employment are inevitable.

The hard fact is that “life” will throw challenges at you, irrespective of being in employment or being an entrepreneur!

We all live in a VUCA (volatile, uncertain, complex, and ambiguous) world, and COVID-19 has just shown us the severity of the VUCA situation!

The challenges I faced and continue to face as an entrepreneur include both external and internal factors, such as:

• clients who are delaying payments,
• Issues of bad debt,
• Change or new regulations impacting businesses
• Deadline pressures,
• Managing customer expectations,
• incorrect employee choice,
• Working capital pressures I can just go on and on…

And yes, in those moments, the doubts about continuing to be an entrepreneur do emerge!

Luckily, I have learned two essential principles quite early in my entrepreneurial journey, which keeps me going:

• First: I realised that life is like riding a bicycle—I need to keep moving to keep my balance! So, the more I persist, have faith in myself, and demonstrate patience, the journey becomes less strenuous and more exciting! Because it becomes exciting, we no longer chase “success,” but pursue “peaceful success,” i.e., chasing success is the rightful way to ensure peace of mind.
• Second: We entrepreneurs often think that the journey is to seek success, but success is always relative! The moment we achieve one success, our mind moves to the next so-called “success” target! We hardly celebrate that success. Over a period of time, I realised that success is a temporary milestone, so celebrate that success in all possible ways for the mind to capture the joyful emotions. This has helped me cherish my journey and remain positive and enthusiastic.

So, what do you do in a crisis like COVID-19?

Remember this equation derived from the above two principles: The longer I persist, the greater I will benefit, and the true benefit is experienced by those who not only pursue “peaceful success” but also celebrate joyfully all forms of success!

Of course, accept failures as feedback and develop an attitude of unlearning, learning, and relearning.

planning for things you “cannot predict”!

I have seen entrepreneurs with scalable ideas, amazing teams, and information systems, but what truly sustains the success of the business is their continued ability to “anticipate success.”

And to me, “continued ability to anticipate success” is the most critical ingredient to remaining successful as an entrepreneur, and I am always finding ways to strengthen this one crucial ingredient!

However, one can anticipate winning only if “one prepares to win.”

To cite an example from ANOVA’s journey, each M&A deal starts with a timeline chart and activities.

In most cases, given the nature of the transaction world, one cannot predict the reasons for the delay, whether internal, external, or both.

In those moments, what keeps the momentum ahead is “the ability to keep the clients engaged and make them aware of the possible solutions and outcomes.”

Sometimes, getting the clients to accept that “things could be different, and that difference can be better” can be tough!

But this needs to be planned, and the preparation for planning does the magic!

In a crisis like COVID-19, what advice would you give to small businesses, MSME, and startups?

A major part of my advisory work is for startups and small to mid-size businesses. So, I know first-hand what challenges they are facing and will continue to face!

All I can say is, “We need to demonstrate our “resilience” as entrepreneurs and prepare to win.”

Those who persist succeed. Period.

We should remember that we are not the only ones in this situation and look around to gather and assimilate the gravity of the situation. The time has come to take stock of the situation very closely.

Hence, my suggestions would be as follows:

• Identify core team members and form a “war room” team to evaluate the business and financial situation and come up with plans.
• Put your efforts toward gaining agreement on short-term plans, which would be easier to manage than mid- to long-term plans given the greater uncertainty.
• Re-visit the business model and remodel as required but with a sense of urgency, i.e., to come up with scenarios such as the best case, the worst case, etc.
• Offer a cash discount for faster collection.
• Freeze all discretionary expenses.
• Negotiate, negotiate, and negotiate—don’t feel shy.
• Take the courage to write to your banker(s) or lender(s), as well as your creditors, about deferring EMIs and other payments.
• Protect your assets.
• Deferment and conservation are the needs of the hour.
• Look out for business opportunities too given the situation, such as manufacturing sanitizers, masks, ventilators, hospital beds, AI and ML platforms for discovery and isolation, other tech support, etc.

Talk to your employees!

On managing contractual obligations, including employee emoluments, we should have open conversations with employees on what can be paid and what will get deferred!

This situation is no secret; everyone is aware of the magnitude of the impact on business, the economy, and confidence.

So long as we help them understand that we are at risk and all efforts are directed towards mitigating the risks, we will gain their acceptance and support.

My personal belief is that anything and everything is possible, but it requires a mindset shift to look within and not outside for help.

We are all blessed with infinite powers within us, and we must tap those powers. Let us develop our inner strength and combat this current challenge together.

How are we dealing with the current crisis while working entirely from home?

A major part of my advisory work is for startups and small to mid-size businesses, and as they are affected by the current crisis, so are we!

But as it is said that “change” is the only constant, one must simply “accept the stark realities.” Learning to adapt is key!

We have created the “war room” team, which is coming up with approaches to ensure minimal disruption as well as scenario planning.

As a business owner, I am aware of the imminent real challenges we would be facing, such as:

• The recession has had a significant impact on MSMEs and their cash flows.This is a clear and present danger. Therefore, “selecting the right clients takes the utmost precedence,” but can be time-consuming.
• network and connectivity issues are impacting the workflow.
• Staff availability, given the health scare, and sustained motivation when working from home
• Availability of finance from banks, NBFCs, and other lenders
• the elongated timeframe on M&A and fundraising given the availability of key people, social distancing, etc.

So what is our “plan of action” to tackle this situation?

We are focusing on the present condition and challenges and coming up with plans to face and manage them as well as strategize for sustenance and growth.

Since our plan of action is limited to the current situation, we have suitably named it COVID as an acronym to combat it, which means:

Chase short-term assignments

• Our team’s focus is on short-term assignments.
• We are confident in handling and completing tasks such as 1) business valuation, 2) business model canvas, and financial modeling.(3) Corporate structuring exercises and similar ones These can be completed without the need for a face-to-face interaction either with the client or with the team internally.

Outlast cash crunch possibilities

• Our goal is to ensure that the smaller and shorter time frame assignments are backed by advance payment in order to maintain momentum until we can resolve the situation.
• We are also optimizing various costs and resources to ensure that we are in “conservation” mode for the near term.

Virtual connectedness

• The team is imparted knowledge on how to use Zoom, Google Hangout, WhatsApp video calls, Skype, LinkedIn, emails, etc. to ensure seamless connectivity.
• When we are facing internet connectivity issues, we switch to the usual phone calls and conference calls!

Initiate opportunities

• There is a lot of encouragement to initiate business opportunities and team development.
• E.g., online sales expansion; imparting knowledge; digging into old business contacts and connecting via emails or phone calls; seeking and providing referrals; exploring LinkedIn connections, etc.

Daily Focus

• Each of us is sharing the focus areas on a daily basis, limiting them to a maximum of three or four.
• This way, we are busy supporting each other, which, besides being motivational, is a lot of fun too!

In Conclusion…

So, in the situation, my constant communication with the team has been: “When we accept whatever is happening, whatever happens, it continues to leave us peaceful.”

We have fully accepted the situation. We are now devoting our energy and time to combat and overcome this situation.

ANOVA offers M&A advisory and fundraising services, along with business valuation, financial and commercial due diligence services, financial modeling, and strategic CFO services to empower entrepreneurs and business owners.

Being sector-agnostic, ANOVA has completed assignments across various sectors, including manufacturing, FMCG, luxury brands, healthcare, hospitality, and technology-led or tech-enabled businesses.