WTF?

What a lot of SMEs are struggling with is the speed at which the latest crisis hit. One minute we were celebrating record market highs, next minute we’re trying to work out how to keep the lights on. How the hell did that happen?

As always, the better prepared you are when you face this latest bump in the road (and what is running a business if not a series of bumps in the road?), the more you’ll be able to thrive. However you and your team are feeling right now, this IS an opportunity to thrive and come out the other side much, much stronger. It just doesn‘t look like it right now.

Having gathered yourself (if you missed the last post about keeping your head, you’ll find it here), here are my Top 5 for how to start getting yourself into an Outstanding Financial Position (or OFP):

1. Take stock of your position. An honest stock of your financial position. What do you owe, and who owes you what. Take a look at your Debtors and Creditors (you’ll be amazed at how many times these two terms confuse people) and be ruthless in what you can realistically expect to get in, in the next 30 days and what you can push out without damaging important, long standing relationships with suppliers.
2. Get on the front foot, and on the phone. No-one likes making the calls that we all have to make at some point - ‘I know we owe you money but you might have to wait‘. Don‘t ignore your relationships that make your business great in good times. Remember you are part of a huge business ecosystem and working together is the best way to get through this. Remember, your Creditor balance with your supplier is their lifeline right now.
3. Reach out to your customers and let them know that you’ll be working with them through this time (ask them...are you OK? how can we work with you more closely?) and are open to communication regarding how and when they pay you. Your terms (hopefully you have them clearly stated on your invoices alongside your bank details!), are your expectations as to how your customers will behave financially. But these are very unusual times. Work with them and let them know that they need to update you regularly with payment dates, particularly if they need to revise them.
4. Sit your whole team down and let them know that we’re all going into a potentially difficult time and that you don’t know how long it will last (also known as the truth). They need your leadership and reassurance, that no matter what, you’re going to work together as a team. This is really easy to do when the sun’s shining, but really easy to forget when you and your team’s brains are flooded with fear and panic. Re-enact the scene in Gladiator when they realise that the only way to stay alive is to form a circle, stick together and battle as a team. Don your war-time CEO costume and go forth.
5. Call in the experts. Now that you really know where you’re at, go against your instinct and invest the time and money to get people in who can help you with the impact of the bumps in the road coming up. Make sure whoever you get in has been through the last crisis (the GFC - remember that?), you need real-life experience not armchair theories now. You’ll know the difference just by talking to them and asking where they were in 2008-2010. If they were enjoying their beachhouse in the Bahamas, thank them nicely and move along.

If you’re ready to prepare for the battle ahead and need a team of Gladiators by your side, reach out to us by PM here through LinkedIn.