Investing in Qualified Opportunity Zones during and post COVID-19

On April 21st, 2020 the sixth episode of Dr. Jim White’s live webinar series aired, featuring Dr. White’s recommendations on investing and surviving during the Coronavirus pandemic. Dr. White was briefly interrupted by a message informing him of the approval of an additional $500 billion in funding for small businesses through the CARES Act, adding weight to White’s message to business owners during these unprecedented times.

White began his lecture on Tuesday evening by posing two questions: “How can we ride out the crisis to emerge stronger than others in our industry?” and “How can the organization learn through this experience to win in a new world post Covid-19?” To guide the decisions and actions that will answer those questions, White emphasized a concept close to him, “the paramount importance of doing the right thing.” And for White, a business owner with decades of experience leading teams and companies, the two most important guiding principles to do the right thing are: “Act now to protect and run the business” and “Plan now to retool the business for the future.” Dr. White explained these concepts further, describing a journey that business leaders will have to take to stay afloat during the pandemic.

“To outrun extinction during the COVID crisis,” White told his audience on Tuesday, “CEOs and teams need to balance multiple parties. It helps to understand the phases of the journey, but for CEOs and teams, it won’t follow a straight line.” White added that some phases would overlap and circle back again, requiring simultaneous action. White then detailed the journey, which has five basic parts:

1. Respond to a crisis and protect the business. White emphasized that when a crisis occurs and a black swan happens, putting the safety of employees and customers first is paramount. White also recommends setting up a war room (which consists of leaders of sales, operations, HR, and finance to deliver critical action plans) to tackle immediate challenges, begin modeling scenarios that are more aggressive than any of your team can imagine, and start focusing on revenues, costs, and cash on hand. “You can’t go broke with cash,” White joked. White also recommended using a digital platform to track the status of initiatives, as well as looking for agile companies to invest in, which are in abundance right now.

2. Ensure the business continuity and stability. The war room should be shifted from reactive to proactive crisis management, while leaders plan a cascade of more severe actions to preserve business viability, identity and what would trigger it. Business owners are also advised to focus on employee sustainability and eliminate non-essential activity.

3. Accelerate through the recovery. White recommends forecasting demand by geography and challenges, developing flexible operational, organizational, and financial plans to capture pent up demand, which White flagged as an investment opportunity. Dr. White also suggested preparing cost structures and balance sheets for the future, and to begin acquiring new investment opportunities. In the accelerate through recovery stage, White warned that firms need to be ready with strong working strategies about the dynamics in their industries.

4. Retool for the new world. “After Coronavirus,” White told his subscribers, “We have to rethink the way we do things.” White emphasized the importance of rediscovering the raw customer needs while avoiding the average customer discussion, adding that CEOs should apply the 80/20 rule to their customers. White also proposed investing or acquiring key capabilities (like Qualified Opportunity Zones), using digitalization and partnerships to help your organization, as well as learning and celebrating initiatives for retooling for the new world.

5. Opportunity lies between the response phase and the retool phase. “With all crises comes opportunity,” White told his followers on Tuesday. Between the response phase and the retool phase emerges opportunities for acquiring viable companies and investing in QOZs.

“The anxiety of uncertainty is certainly taking a toll on employees, creating the need for support more than ever,” Dr. White told his audience, asserting the need for companies to create strong foundations for their employees during the crisis. Fortunately, as White offers his weekly guidance to leaders, CEOs, and business owners, the path to emerging as a strong and healthy enterprise is clear. In his closing on Tuesday night’s webinar, White championed flexibility and quick reactions to crises, “The companies that adapt faster to the initial upswing and eventually a new environment will emerge stronger than ever.”

Jim White, PhD is Chairman and CEO of Post Harvest Technologies, Inc. and Growers Ice Company, Inc., Founder and CEO of PHT Opportunity Fund LP, and Founder and President of JL White International, LLC. His new book is a heartfelt rallying cry for investors: Opportunity Investing: How to Revitalize Urban and Rural Communities with Opportunity Funds, launched March 31, 2020.

Dr. White was raised in South Carolina. He holds a BS in civil engineering, an MBA, and a doctorate in psychology and organizational behavior. He acquires struggling businesses to revive and develop them into profitable enterprises using his proprietary business turnaround strategy. To date, he has generated more than $1.8 billion in revenue. 

Dr. White is hosting his regular Opportunity Investing Webinar Series intended to educate and provide a roadmap to Qualified Opportunity Zones and Qualified Opportunity Funds. Stay tuned for his upcoming webinar.