ONCE in a while we go through difficult times such as these, where just being able to survive is good enough. Sometimes this is easier said than done. Nonetheless, there are certain practical things that can be done to increase the chances of your survival. The first thing to do is to ASSESS the situation, come up with a BLUEPRINT for your plan of action and finally keep a close watch on your CASH FLOW.
Do not act on impulse. Learn how to properly assess your situation, which would include your worst case, most likely and best case scenario. Explore all your options and the potential outcome. It would also be good to validate the information you have on hand to make your assessment. This is normally done through cross referencing, checking the source for credibility, getting a second opinion and if possible confirming with the appropriate regulatory government agencies.
From your assessment of the situation, come up with an action plan that will serve as your blueprint to survive through the difficulties you are currently encountering. The more accurate your assumptions are, the better you blueprint will be. Make sure your blueprint is designed so that it can adapt to a changing situation and is flexible enough for a quick response. You may want to compare your blueprint with what your leading competitors are doing and adopt best practices.
Making an accurate cash flow projection for yourself or your business is a critical element for survival. Typically during times of crisis, the cash inflows are the ones affected in that they either totally stop or slow down considerably. In trying to keep the cash flow coming in, there are several things that can be done. Some businesses adapt their business model to suit the current situation.
As an example, during the Covid-19 quarantine restrictions, many restaurants were forced to close their operations and those that were allowed to open had to follow social distancing and other safety protocols. This resulted in a lower seating capacity and a significant drop in patrons. To augment their lost sales, they entered into takeout orders and food delivery service to be able to generate sufficient cash flow to stay afloat.
On the cash outflow side, people and businesses have to live within their means. For people who lost their jobs, they had to tighten their belts and live off on savings until they are able to find another job or the companies they worked for resumed operations. With no source of income, they could not afford to maintain the monthly amortizations for their cars and homes, they could not afford to maintain luxuries like eating out, and they could not even pay for the education of their children. So in these dark times, knowing what expenditures to prioritize is key.
As a business, you may be forced to defer payments to your suppliers and landlords. With limited or no operations, you are forced to close down operations, branches and lay off people just to conserve cash to stay afloat and survive until the crisis is over or a new business model that works is in place. Harsh measures? Yes, definitely! However, you need to bite the bullet to survive and open another day.
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