- You must have a positive “Can Do” attitude
- In a period of economic distress, Business Owners must BE ALERT to need to make the change, they must ALSO be prepared to take decisive action to guard against financial obligation.
- Denial is the most common pitfall and must be avoided.
- Inaction is the riskiest response to the uncertainties of an economic or financial crisis.
- Remember: No decision is a decision.
- Resilience requires both alertness and the ability to take thoughtful action on a timely basis.
- It is very important that Management HAVE A SENSE OF URGENCY about taking decisive action.
2. Take Steps To Stabilize The Business
- The first step needed in a period of economic or financial downturn is to stabilize the business.
- FOCUS ON CASH. Make sure the business has sufficient liquidity to weather the crisis.
- Identify ways to pivot to take the advantage of current demand and longer-term opportunity. Then take the necessary steps to implement the needed changes in your business model.
- Ask the Question: Is there an opportunity to pivot or alter your product offering or service to your customer base or others?
- BE PROACTIVE in taking the immediate and necessary steps to manage the shortfall due to lower revenue or higher overhead costs than currently justified. Make cuts as necessary to mange the shortfall and cashflow.
- IT IS UP TO YOU – You need to figure out the best way to survive..……
- Maximize both your performance and cash flow during the economic or financial downturn.
- Prepare a 13-week rolling direct cash flow forecast based on your most likely collections your payment priorities.
3. Communicate – Communicate – Communicate
- CALL YOUR CUSTOMERS: Make sure they will be able to maintain their outstanding orders and revenue bookings that you have forecast.
- Make sure there are no surprises with your customers.
- To meet shifting demand – RETHINK your product mix or service offering and procing strategy.
- Then – EXAMINE how your income statement and balance sheet will be affected under the different scenarios.
- COLLECT RECEIVABLES by actively managing customer credit and collections – make calls as necessary.
- Speak with your vendors and trade payables and let them know of your need to stretch payments.
- Call your landlord to discuss lease payment options. Contact your lender. Contact your attorney.
- Examine all lease and loan documents to determine issues of default and take necessary action.
- Communicate with your employees an all stakeholders – BE OPEN AND HONEST!!!
- Meet weekly with key members of the management team to respond to sudden plan changes.