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Addressing the Financial Challenges Business Owners Face During COVID-19 – Ted Jenkin, oXYGen Financial



Today on ASBN, we’re pleased to welcome small business expert Ted Jenkin, founder and CEO of oXYGen Financial and host of the Atlanta Small Business Profile.


Ted Jenkin

Jim Fitzpatrick: Hi everyone. Jim Fitzpatrick with the Atlanta Small Business Show. Thanks so much for joining us today. Today we’ve got a special guest with us, Mr. Ted Jenkin, and we’re going to talk a little bit about the Coronavirus and the impact that it’s having on small businesses here in Atlanta. And I know this is something that’s near and dear to your heart, Ted. First as a small business owner. Second, as a small business expert. I know that you consult with literally hundreds of small business owners here in the Atlanta market and elsewhere. What are you telling them today? I mean, you probably hear the panic in their voice when they call to say, “Ted, tell us what should we be doing right now? What should we focus on?”

Related: Find Economic Relief for Your Business in the Wake of COVID-19 with These Resources from the SBA – Ashley Bell, White House Advisor

Ted Jenkin: Sure. Well, you’ve got to take a step back from your business and make sure you’re aware of all the resources that may be available to you. And Jim, this is changing daily.

Jim Fitzpatrick: I know.

Ted Jenkin: The government is providing certain loans and the SBA and you’ve just got to take a look at what’s available. We may see a payroll tax holiday where the government may give you back anywhere up to a hundred or 200% of your payroll tax. But Jim, this changes daily right now. So I think you’ve got to make sure you’re aware of all the resources. Second thing is you look through your P&L (profits and losses) and say, what’s essential to me here? Because obviously you don’t want to let people go if you don’t have to, but you’re saying, are there things that I can cut that actually won’t cut the labor force in my business until I have to cut that? And see what you can take off, sort of that fat that you know was in there.

Jim Fitzpatrick: There’s no question about it.

Ted Jenkin: But the one thing I tell most business owners is that you can’t really take the foot off the pedal of marketing and you’ve got to think about being creative about how you bring in revenue. If the normal ways that you bring in revenue are stunted. Think about a restaurant. If a hundred people can’t come into your restaurant then you have to figure out a way to bring the restaurant to them.

Jim Fitzpatrick: That’s right. And there’s so many different apps now, whether it be Door Dash or Uber Eats or maybe that’s an area that some restaurants said, well, we’re going to stay away from that, but now they’re probably calling those companies now and saying, “Hey, get in my restaurant. We need to get this food delivered out.”

Ted Jenkin: Well, we’ve seen not only that, but people have really figured out more quickly here. Business owners, they’re very… Being an entrepreneur they can be very genius in how to create ideas to keep the business going.

Jim Fitzpatrick: Sure. That’s how they opened up.

Ted Jenkin: We’re seeing a lot of grab and go. We’re seeing a lot of curbside delivery and saying, “Hey look, we still have the same great food in our restaurants that we had before.” Let’s figure it out how to get it to. No, you can’t sit and have a bottle of wine and sit here for two hours, but we’re going to figure out how to still provide great food to you so you’ve got to have some ingenuity right now to figure out how to keep your business going.

Jim Fitzpatrick: That’s right. One restaurant owner that we spoke to said, “Yeah, my bartenders and my waiters and waitresses right now are today, my delivery people.” He said, “That was the deal that I made with them. We maintained our marketing.” To your point, which I think the first thing that people want to do is reel everything in such as the marketing. To say, wow, if I was spending 3000 a month, 5000 a month, whatever it is, stop that immediately. Don’t do that. And what you’re saying is, is to say no, keep marketing. Maybe change the message a little bit in terms of how you can now help that consumer that’s out there.

Ted Jenkin: We had a company that was doing a lot of corporate gifts and obviously right now corporations aren’t probably firing off gifts left and right. Although I will tell you, Jim, there’s a great deal on lobster right now. Believe it or not, that lobster prices came down 40%. We actually sent out in our business lobster tails to our top 50 clients and we asked them if they would claw us in a referral right now.

Jim Fitzpatrick: There you go.

Ted Jenkin: But you’re doing something to think about keeping that marketing engine going, but you have to maybe have a softer message. So that company we talked about, there may be a stay at home night or there may be a family night. Or some way that that particular product could actually go to the household. But you’ve got to be sensitive because this is a health crisis right now. That’s creating the small business crisis.

Jim Fitzpatrick: That was actually my next question. Should businesses even remain open? Even though that it’s not been ordered by the governor to shut your business in Georgia? Should they remain open?

Ted Jenkin: I think we’re seeing now, it varies from County to County. It varies from city to city and it’s varying from state to state. It’s not the federal government that’s driving it. I think you’ve got to be sensitive most to making sure that you’re not spreading the Coronavirus and make sure that you’re following the guidelines to take care of people’s health, while you also still figure out how to sustain your business. So I think every business is going to operate a little bit differently. Some are pure e-commerce and maybe not much is changing, and you have some where hundreds of people may walk into your business every day and you’ve got to figure out how to make sure you’re still safe, your employees are still safe and the customers are still safe while you drive business.

Jim Fitzpatrick: That’s right. Should companies, I should say business owners, should they be hoarding cash right now? Should they be going to their available credit lines and saying, “Hey, while it’s there, while I’ve got 100 000 or 200 000 available to me, while I haven’t needed it, should I grab that line of credit in your opinion right now and try to get as much cash as I can because we don’t know how long this is going to be? I don’t know if I’m going to be out of business for, let’s say, a month or two months or three months, whatever the case might be.

Ted Jenkin: I mean I think this reminds us that, much like our personal finances, every business should also keep three to six months in a cash reserve if you can do it because this virus or not, there are going to be opportunities and there are going to be emergencies that come up in any business at any given time.

Jim Fitzpatrick: That’s right.

Ted Jenkin: So this happens to be real extenuating circumstances, but yes, Jim, I would get my hands on as much cash as possible and if the banks that you’re working with will extend or give you more lines of credit, it’s better to have more bullets in the gun now than not, because we don’t know if this is going to be two weeks or 30 days or it could be till the end of the summer or longer. We just don’t know right now. So you’ve got to shore up your cash position for your business.

Jim Fitzpatrick: That’s right. We had the opportunity to speak with Ashley Bell, who’s the director of the Southeast for the Small Business Administration, the SBA, and now Georgia, as of today, is one of those states that’s under the SBA, that can go ahead and loan money. They’ve been approved for that and I guess our governor said, “Hey, it is an emergency situation.” Which is when the SBA can kick in. In this situation, unlike a typical SBA loan, the actual SBA, the government is loaning the money. Not the bank underwritten by the SBA. They also said that they’re dropping a lot of the different tough restrictions and guidelines. So if you are a small business owner, it’s pretty easy to get $25 000 and under. They can do that. They can deliver that in seven days.

Jim Fitzpatrick: For the loans that are over 25 000 they need a little bit more paperwork and some tax returns and things of that nature. But it’s okay if you’ve got credit and if you’re credit challenged, it’s okay if you’re running in the red. All of these things just to keep people moving forward. They are asking that some of those funds do go to keeping the employees on that you’ve got, if it’s possible, it’s not necessary. So there are some ways out there, isn’t there, that the small business owners…

Ted Jenkin: I was going to say Jim, for a lot of owners, this is an inflection point. Your business may not have been doing well before this and you just really weren’t prepared to run a business and it actually might make sense to fold. There are some business owners that you still have a good business and getting that cash from the SBA or getting your lines of credit, sustaining through this, knowing that you’ll be better on the other side. And there are actually some businesses that will thrive during this. Not every single business is going to get hurt. Obviously the service industries and places have hospitality or your business that’s surrounded at the state farm arena or the Mercedes Benz, you’re probably going to get hurt worse, but other businesses will do better. But you try to be as creative as possible to sustain through this painful time until we get on the better side of it.

Jim Fitzpatrick: And to your point, it forces that business owner to take a look at that cost sheet or that expense sheet, I should say, to say, do we really need that subscription to that particular company that we never use? Do we really need to be spending this money on some type of a widget that we never use? In good times we get sloppy with our financial statements, don’t we? And with regard to, yeah, let’s get it, let’s use it, let’s buy it. Every manager seems to need something that maybe the owner looks at now and says, let’s go through this expense sheet and see exactly what we need and what we don’t need. So when we come out on the other side, you’re actually coming out with a much cleaner expense sheet.

Ted Jenkin: Well, this is the idea of buying local. I’ve always been a big fan of buying everything I can local, I’m in the financial services business. I wish all people would buy their financial services local because I may be the kind of guy to give them a break on their fees right now because I realize things aren’t going well. If you have a local IT company or a local copier company, you may not have to cancel. They may say, look Jim, “We’ll work with you. We’re all in this together.”

Jim Fitzpatrick: Very good point.

Ted Jenkin: If my business trickles down and I’m not buying IT, copier, supplies. All those collateral damage and all the businesses here in Atlanta will suffer. But if we all band together and say, let’s help each other out and get a break, it’s always why I shop local.

Jim Fitzpatrick: That’s right.

Ted Jenkin: Because I think we all know what’s going on and if we all help each other, I think collectively, not everybody, but a lot of us will make it through this and better on the other side.

Jim Fitzpatrick: And you bring up a great point. It’s… Excuse me, sorry about that. Now it’s going to catch me laughing. Why are these two laughing about the Coronavirus? Sorry, you bring up a great point and that is go to all of your vendors. Even if it’s the electric company, the phone company, whatever, and let them know that you’re having a problem in this area because you’re on the verge of maybe losing your business. They will work with you. I mean, I think–.

Ted Jenkin: Oh, definitely, I mean we’re all in the same business of thinking, if I get zero , something better than zero is something. So when you think about all of those services that you buy, you might have a water machine. You may be buying K cups from somewhere or office supplies. Like I said, almost every business you’ve got an IT service company or you have a copier company. You have all these kinds of things that normally in the run of the business, Jim, you’re thinking these are just rounding error expenses in my business, but all those nickels, and I will coach business owners on this, lead up to dollars and we’re doing it in our business as well.

Jim Fitzpatrick: I know. Us too, us too. Maybe you don’t need the janitorial service three days a week. Maybe you-

Ted Jenkin: Cut it to two days a week.

Jim Fitzpatrick: Or maybe even one. Tell everybody in the office because right now maybe you don’t have the staff in the office that you had the entire week. So why do you need the janitorial service like that?

Ted Jenkin: That’s right.

Jim Fitzpatrick: Wherever you can really pick up an extra buck.

Ted Jenkin: I want to say it, on the other side of this, again, as a business owner, you have to be opportunistic as well. And we talked about marketing, which we will not stop marketing. We’re doubling down our efforts. But on the other side of this, think about this, we all know more unemployment is coming. We don’t know if it’ll be 6% or 10% or like secretary treasury Mnuchin said it could be 20%. But if you were looking for talent, talent just until this Coronavirus was in short supply.

Jim Fitzpatrick: Good point.

Ted Jenkin: Now there’s going to be people that not only may be talented, but they’re hungry, Jim, they do not have a-

Jim Fitzpatrick: They’re also going to be cheaper.

Ted Jenkin: I mean the governor might give them a check for a month or two, but they’re not going to pay them for 12 months. That’s not going to happen. So you could have an opportunity to pick up somebody who’s hungry, who’s willing to work hard and they will be forever more grateful when your business gets back up and running.

Jim Fitzpatrick: That’s also a good point. Before you tell that great employee that you’ve got that, “Hey, you’re off the payroll, we can’t afford to pay you.” It’s not necessarily going to be the case that that person’s going to be available in two months when you are back in business. They might get zapped up by somebody. So before you think, well I can save some money here by not paying Tommy their salary while they’re out. Be thinking that it might not be a bad investment. Probably a good investment to keep Tommy employed or on the payroll I should say. So that when the time comes, Tommy doesn’t say, “Sorry, but I already took another job.”

Ted Jenkin: If you have an employee that’s worked for you for five years or 10 years or longer and you’ve had holiday parties and you treated their family well, they’re probably loyal to you as a small business owner.

Jim Fitzpatrick: That’s right.

Ted Jenkin: And if going to them saying, Jim, I don’t want to fire you or lay you off, but if you’re willing to take a 10% pay cut now I will help make some of this up on the backside to you when we get on the other side of this. But these are not circumstances I created. We weren’t running our business poorly. We didn’t make mistakes. We had a massive health crisis that’s had a trickle down effect that’s making a small business crisis. That’s what happened in here, and I think most people will understand that. They don’t want to be out of work for three months or six months or looking for a job.

Ted Jenkin: So that’s another negotiation tool. If all the employees in your company are in it together. And for a lot of small businesses, Jim, bigger than large corporations, people are really loyal to their small business owners. They see the plight of what happens day to day.

Jim Fitzpatrick: I agree. I’m going to switch tracks a little bit with you because you own a highly successful financial services division, Oxygen Financial, it’s a name that everybody in Atlanta knows and you guys enjoyed such a great name in that. What are you telling your small business owners and other investors right now? Your phone must be ringing off the hook going, “Oh my gosh, the stock market’s dropped by 3000 points.” And so what are you telling them? What’s the consensus out there?

Ted Jenkin: Well, these are very interesting times. I mean, this was the fastest bear market from the peak of the market in the history of the market by many, many, many days. And simply put, the stock market probably will not return to normal until the lives of people return to normal. Because again, it’s not a financial markets crisis like 2008. It’s not a tech bubble like it was in 2000, 2001 and 2002. This is a health crisis. We’re also seeing Jim, that the motivator of fear has always been the greatest motivator more than greed in the stock market. So you’re seeing two types of things in the barbell here. You’re seeing panic selling on the stock market. And you’re seeing panic buying at the grocery market.

Ted Jenkin: You’re seeing both ends of this right now. So what we’re telling investors, if you’re younger and you have a 10, 15, 20 year timeframe, these are part of the normal cycles that happen. They happen every 10, 15 or 20 years. But if you’re older and you’re approaching retirement, you may need to get some cash on the table right now because you’re going to have to withdraw money soon and think about a more protective strategy because we don’t know, as we shoot this today, if this is going to be the end of it. If this sustains for six months, could this go 30 or 40% worse? Of course it could. Of course it could because if we have to bail out people for more than three months or four months so we can bail them out for six months. It’s a lot of risk that the federal government is putting on the table.

Jim Fitzpatrick: So there’s no hard and fast rule that says, sell everything now or conversely, try to buy everything now? it’s really an individual–.

Ted Jenkin: But is it really a safe place? Gold has been down, bond market has been down. So people will say maybe the safest place is cash. But remembering Greece only a number of years back, that people couldn’t get $20 out of the ATM machine. So remember your bank, even for business owners, if you have $500 000 in the bank, they don’t have $500 000 of your money. They’re loaning most of that back out. So if there was a run on the banks, your money at the bank is no safer in that respect than it would be somewhere else. So you’ve got to put a prudent strategy together. But it’s also why we tell owners, it makes sense to get diversified that you’ve got real estate in your portfolio, you have stock market in your portfolio, you have cash in your portfolio. Because if you’re not, the risk of being all in the market is what we’re seeing now.

Jim Fitzpatrick: Right, right. Well, I spoke to one business owner that was just on the cusp of opening up their new business and, I mean really, they had the ribbon cutting ceremony already planned and they said, “You know what, we’re just going to lock the door and we’re going to pay the rent on the unit. We’re going to tell all the employees, this hit us hard and we’re going to revisit this in 90 days and see where that takes us.” And so probably wasn’t a bad idea in that case, but are you seeing some companies that are saying, “Hey, maybe the best thing to do is just send the employees home, shut this baby down and pay the rent and weather the storm?”

Ted Jenkin: I think almost everybody on their play track is starting to hit the pause button. And that’s what they’re doing. They’re not saying no, stop. They’re not saying play, but they’re saying, let’s put this thing on pause right now because we’re in the certainty of uncertainty right now. And that’s very difficult way to navigate a business. And so I think you’re going to see a lot of new deals just halt until people see where this goes.

Jim Fitzpatrick: I agree. Ted Jenkin. That’s why we love having you in here in the studio and of course your show, the Small Business Profile right here on the Atlanta Small Business Network. I want to thank you for all your contribution and being here with us today to help small business owners navigate this uncharted water that we’re in right now, so thanks so much. And stay tuned to ASBN and for all information about the Coronavirus and how you can survive and thrive perhaps.

Ted Jenkin: That’s right. Thanks.

Thanks for watching Atlanta Small Business Show with Jim Fitzpatrick, this has been a JBF Business Media production.

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