THREE STEPS TO TURN TODAY’S ECONOMIC CRISIS INTO TOMORROW’S OPPORTUNITY
Almost overnight the world as we know it has been turned upside down. These are uncharted waters we are in and there is no way to know what lies ahead or what will come next, not yet anyway. As this new reality begins to set in, it is easy to panic, to become numb and unable to act, or to head off in whatever direction we are facing, just because it feels better to be taking action than to do nothing. Or worse yet, we turn back to what has worked in the past because we think that is safe.
Don’t. The storm is still building and the waves are crashing all around us. Now is not the time to be running into harms way or trying to decide which direction we need to be going.
Now is the time to be calm and focus very clearly on what you can be doing right now. Damage is already evident and now is the time to begin triage. What can we do to stop or lessen the [potentially negative impact?] damage and the bleeding?
And in that process, hopefully everyone will resist the urge to just begin laying off employees. That may be necessary but employees are part of the valuable capital of every business and they can be an important part of the solution when doors open again and they will help you rebuild faster.
What should we be doing? Three steps.
One. Revisit the long term critical plan. Has it changed as a result of this economic crisis? What is your vision and what are your goals? It is that vision and those goals that will guide your next steps. Many business owners have trouble putting this step first or ever taking this step at all. Certainly if the business is hemoraging, you have got to stop the bleeding before anything else. But there are going to be some very hard decisions to make in the weeks and months to come and those decisions will be much easier and likely more reasoned if they are guided by the vision and goals you have developed.
Two. Assessment and triage. Create a list of essential and non-essential costs and services. Be brutal in assessing what is essential but don’t forget that the goal is to maintain the capability to begin to recover as soon as possible. Don’t sell off critical infrastructure or assets that you will need to recover. Cut the non-essential items from your list as quickly as you can.
Don’t wait to begin this process. The longer you wait the more critical resources you will burn.
Next are the essential resources. While you don’t want to cut them, you do want to minimize or defer their associated costs. Rent and lease payments are the first place to focus. Seek rent abatement and deferral. Move current payments to the end of a lease. There are many ways to spread some of this economic burden between you and your vendors, but reach out now and communicate. The absolute worst approach is to just start missing rent and lease payments.
The last part of triage is to take advantage of government resources as quickly as possilbe. You want to be first in line and you want as much cushion as you can access.
Third, don’t wait to get ready for the recovery. Now is the time to start planning how you will hit the ground running when work restrictions are lifted. You know where you want to go. That was step one. You have stablized as much as you could. That was step two.
Step three is to determine where you are and where you are likely to be when the restrictions are lifted and to plot a path to move forward toward your goals.
Wherever you are now, you will be much more likely to reach most of your goals if you are willing to plan now. We help business owners sort through the chaos and clarify their goals. We help with triage and stopping the bleading by negotiating debt relief and by restructuring contracts and legal obligations. We help business owners build a clear path to their goals.