We still don’t know exactly how long this coronavirus pandemic will last. It looks like it will last, at least to some extent, through the beginning of next year.
And it could drag on even longer.
So what do you do if you can only shift so much of your sales online? What if your state or community decides to lock all businesses down?
What if your only hope is to rely on government assistance through PPP, which you know you may not get even if you do qualify?
Here’s what to do during the most dire business circumstances:
1. Keep Expenditures to Only The Bare Minimum
If you haven’t done so already, reduce your expenditures to the lowest amount possible. No detail is too small.
Turn the lights off every second you don’t need them. No more catered lunches. Slash your own benefits and salary to keep things going for yourself and everyone else.
Focus on keeping things going just one day at a time. Do the next right thing as you become aware of it.
And make sure nothing gets minimized as not important enough to examine.
2. Consider New Services and Product Lines
“Necessity is the mother of invention,” as it is said, isn’t it?
Think about your past new products and services you’ve offered. Did they require a large capital investment?
Sure, some did.
But not all do.
What can you offer your customers that they seem to want at an affordable cost?
Now may be the time to give that back-burner project or process a try and see how it may generate the new revenue you need to stay alive.
3. Create a Cash “War Room”
Your CFO’s going to have to continue to high-tail it as best as they can. McKinsey & Company recommends creating what they call a cash “War Room.”
Divestitures, joint ventures, lines of credit, and any other means of raising capital need to be considered by your CFO.
Even if you don’t need it at this point, talk to all of your creditors about getting the most favorable repayment terms possible. That way, you’re prepared if things really hit you hard later on.
This “War Room” can also make decisions on how to prioritize paying bills. And it should also have access to real-time liquidity data.
4. Double Down on Collections Activity
Whatever you’ve been doing to collect payments from customers, now’s the time to dial up the pressure on stragglers.
Contact them and ask them when you can expect payment. Use legal processes available to you to issue warnings.
You might also need to ask for more money up front. And in all cases, you may need to negotiate payment terms.
That can mean extending better terms to your current customers and tightening terms to your not-as-good customers.
It won’t be easy. But you can do it. And hopefully these tips help you make it through.