As the COVID-19 situation progresses daily, quick decision and focused action must be on managing your cash!
Some tips on what we have discovered after having spoken to various business owners and Directors of Limited Companies over the last few months.
- Preserve cash – take payment holidays where offered (VAT and loans), give up office space, cut or furlough non-essential staff, reduce hours and take salary cuts (or even no salary), move people into different roles and negotiate with suppliers for better terms. Spend money ONLY to make money!
- Bring in cash – give discounts to keep customers and win new ones, up-sell and bundle, chase payments. Bring forward R&D (Research and Development) tax credit claims.
- Re-forecast for worst case scenario – question every previous assumption; assume this will last 12 months; update your forecasts regularly (weekly and daily), with real data.
- Delay fundraising (or plan for a lower valuation) — there will be less money available as investors will be more cautious or focus on supporting existing portfolio.
- Do the right thing – the way you handle this crisis will be remembered. Swift action is less damaging to team morale; flexibility with customers will build goodwill.
- Over communicate – with customers, suppliers, investors, partners, peers. Even if it’s just to say you’ll be in touch properly soon.
- Keep yourselves and your people fit and positive – both mentally and physically.
- Look for opportunities – to pivot, or to hire previously unaffordable talent, to merge, exit or form new partnerships. Rethink your marketing.
- Be open to advice – seek out advisors who’ve navigated previous crises.
- Come out of this a winner by demonstrating resilience and excellence.
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