Action Points for Business Continuity in Stressed Times

We all are currently going through a tough situation. All businesses are affected. Most entrepreneurs face tough situations daily but the current situation is unprecedented. Business being shut for a month with fixed costs (rent, interest, salaries, electricity etc.) still to be paid can cause lot of stress on the business.

As I am used to handling stressed situations, I get lot of questions on what can be done in such situations. Here are some action points for business continuity in stressed times:

1) Cashflow is KING : In current scenario, concentrate on your incoming and outgoing cashflow. It is difficult to ask customers for payments in times like these. Keep in touch, request and if possible get those cashflows. Control your outflows. If you are not used to making a weekly or monthly budget, this is the right time to start. Be empathetic towards your creditors. Requests your creditors to give you time if your cashflows are stressed. Most will understand the situation because somewhere they are facing similar situation.

2) Fixed Costs : I know in tough times how it feels to have fixed costs and no cashflows. There are multiple solutions to this problem. In the order of effectiveness with most effective first and least effective in the last:

a. Infuse : Put extra capital in the system. If we have our own money that can be added, that is the best solution. Debt and Equity from various sources are other options. The reason this is the best solution because it sends out a very clear message. You are strong, rock solid and your reputation enhances. If we are able to weather this storm with show of strength, we come out victorious when the storm passes. The message is clear, everyone wants to do business with people who can meet their obligations especially in tough situations. 

b. Prioritize : If we cannot make full payments to all our obligations, prioritize the obligations based on business continuity. Know, what will keep the business going. Lets tighten our belts. Lose some excess fat. There is lot of learning in this situation, lets grab them. Once the priority has been set, stick to the plan. Weather the storm. Keep the business going.

c. Defer : Lets talk to our creditors. Have a plan in place. Do we want to ask for time or concession? Are concessions necessary for business continuity? If they are, then it has to be asked. Know what you need, time or concession or both. Lets ask our landlord, lenders, utility company and other business partners for time and concession, if required. For some it is difficult to ask help from your team. I never find it difficult to ask help from my team. If the team needs to take a salary deferment or cut for the business to continue, then that is what we should ask. That is the last option we should exercise, not the first because it is the team that will take the business forward.

3) Business Continuity : The toughest and most important part is business continuity. During and after the crisis, it is important to keep the business going. Here are some important points to consider in this regard:

a. Be confident in your value : Business is a function of demand and supply. If we were providing value to our customers before the crisis, can we provide the same value after the crisis? Does my customer require the same value once the crisis is over? Can we improve upon the value we were providing? If we are providing value and If our customers require the value we are providing - Why should we be worried? 

b. Keep moving forward : Just because we are confined does not mean our business is confined. Keep your business moving forward. 

c. Pivot if need be : If we think that our value proposition will be dead after the crisis then you need to pivot. If not you can decide to continue with the business like before. 

d. People : Tough times will force lot of people to show us their real face. Our customers, vendors, team members and even investors will show you a side you have never seen before. Know who to keep and who to let go once the crisis is over. 

e. Know Ourselves : This is the most important of all. Being an entrepreneur is not easy. Let us use this time to know our self deeply. Meditate and introspect on what we can or cannot do. Our business will survive if our entrepreneurial zeal survives. 

"Survival of the fittest" - Is our business fit enough to survive this crisis? Are we going to let our business die? What can we do to survive and come out stronger on the other side? We need to answer these questions successfully.

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