Lessons for Crisis
2. In business, cash is blood.
If the business is burning cash, you need to get to the heart of the matter quickly. Look everywhere. For example, in some cases, products are priced incorrectly. You may have to cancel or turn away orders, because selling them will cause greater cash loss. Offer one-time discounts on your receivables for early pay, sell off inventory, and explore every line item of your balance sheet to generate cash to help fund your turnaround plan.
Task: If you haven’t created a 13-week cash flow projection, create one immediately. Determine the cash needs of the business as it is, then begin developing a plan to reduce overhead, which will improve the cash flow. Concurrently, figure out which assets can be liquidated or leveraged immediately to bring cash into the business to keep it alive.