During a prolonged economic crisis such as the current COVID-19 pandemic, a business must act proactively to preserve cash at the onset of the downturn in order to improve its chances of survival.
A business's cash is utilized quickly for a variety of reasons, including reduced consumer spending and disruptions in supply chains. Every business facing the possibility of serious interruption should:
KEEP as much of your current cash as possible. To accomplish this goal, you should review operations with an eye towards reducing costs and eliminating all fat
LOCATE cost-cutting measures, including laying off staff without incurring unnecessary liabilities
PREPARE a revised cash flow analysis that conservatively takes into account factors such as:
SEEK consensual deferment of payments to secured creditors ‑‑ either immediately or sometime in the future.
MAP OUT a longer-term plan for the good, aiming to be ready to ramp up the business once the economy recovers.