In an earlier life, I ran businesses. They were all turnarounds. Four succeeded. One failed. Here are some lessons I learned from that high-pressure period of my life that are relevant for today.
Adjust your goal. Your goal should be survival. This means preparing for the worst and hoping for the best. Take all experts’ projections with a grain of salt. TV shows will have economists and astrologers with predictions No one knows. After this pandemic passes the chimp who throws the dart closest to the right answer will boast about his/her accurate forecast and will be feted. Right now, no one knows. So be as conservative as you can.
Re-do your projections now and every week. Everything has changed, especially your revenue assumptions. Develop new assumptions. Stay in touch with your customers (if you can) and make conservative forecasts. Seek flexibility. Do 13-week forecasts and update them every week. Even if you have to shut down, make projections of your cash with zero sales.
Talk to your financiers. Keep them informed. They will guess the worst if they don’t hear from you. In our portfolio, we appreciated those who called and kept us informed. And we wanted to hear from the reluctant ones who were hoping that the storm would go away and they could report a rosy picture. Get real. Your financiers know you have issues, unless you are Costco.
Talk to alternate financiers. In some cases, your bank may refer you to other financiers, including commercial-finance companies who can lend you money against your inventory and receivables (assuming you still have good ones). They are more hands-on and more expensive, but they may be willing to lend. Also talk to others who may not have a relationship with your bank. These include local, state and federal government financiers. All of them will have an interest in keeping you alive and hopefully, successful. This is the time to look at everyone who can help keep you alive. And talk to friends and family who may be able to help