How to Steer Your Business through a Crisis

With constant changes, your business may be presented with cash flow challenges and opportunities you may have never faced before.  You have to be ready to respond to these changes, you have to be ready toImprovise, Adapt, Overcome.


-Cash Flow will suffer.  If you are a cash-based business you are lacking significant, if not all cash flow.  If you are an insurance-based business you still have cash flowing coming in today, but in three to four weeks this will be significantly diminished.  Are you ready?  Develop your plan of attack by first determining expected profit or losses, and then be extra mindful of customers and insurance companies taking longer to pay you and vendors needing you to pay them faster.

-Revenue: This is an exciting opportunity for every business.  What can your business do to generate revenue in a new way? Start by looking at what the market needs and see if you can meet that demand. You should have already revised your budget for at least the next three months to better forecast needed revenues to continue operations. This will not be a one and done job, you will need to revise it regularly as we move through different phases.  

Employees: This is the hardest part for any business owner. In a perfect situation you would protect all your employees, but you must make difficult choices.  To help make these decisions as the following questions: Who is essential to the business? Can we retain employees and lower hours? Can we outsource positions to cut costs?

-Expenses: What cash out flow can be delayed (or hopefully eliminated)?

Have you contacted your landlord to request assistance is rent (or mortgage) payments?  What discretionary costs can be cut or delayed?  Such as certain advertising, travel, employee benefit plans.  Cut back, and delay capital expenditures and purge expenses that are not driving revenue.  You should also review contracts that can be renegotiated or voided to reduce expenses. 


-Customers: Remember, your customers will be negatively affected by the crisis as well.   Can you adjust customer payments to provide consistent cash flow?  Any payment will be better than none, plus your good will pay off when normalcy returns.

-Vendors and Suppliers: Have you contacted your vendors and suppliers to extend payment terms? Push back payments as long as possible and also look for new supplies who are eager to work with you. 

Funding Sources: Do you have access to the cash needed to fund your business through this downturn?  Not every business will receive the federal loans that are available.  Have you contacted your bank to set up a line of credit or increased your current line?  Unlike the downturn in 2008, this one has not affected the banks from a cash flow standpoint.  Money is inexpensive and you might have the opportunity to use other people’s money to help you get through the crisis. If all else fails do you have life insurance to take a tax-free loan from?  As a last resort credit cards should be used. 


If you are like most, you did not have a contingency plan for the current situation.  Do you now have a plan to overcome the crisis in front of you? It is imperative to quantify your cash flow needs to make the best decisions.  Have you adjusted your cash flow models?  Have you evaluated all sources of funding to meet your short term, and long-term funding needs?  Do you have plans in place to ram up after the crisis is over?

Andrew Vertson, PT, DPT, ATC
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