The Covid-19 pandemic has greatly disrupted our lives and our businesses, both large and small. Small business owners must take some immediate action, but also need to consider the best path forward and be ready for the eventual recovery. The MidFlorida SCORE chapter has pulled together recommendations for how to respond to both the challenges and the opportunities this presents.

Key Initial Step:

Take a deep breath…understand that you are not alone here and are part of a global situation that is affecting almost every business. It’s time to set aside the stress of the unknown, even if just for a few minutes, to evaluate the reality of the current situation. Being objective and as transparent as possible with all of your key stakeholders is going to be key to finding a workable solution.

Action Steps:

  1. Assess your current cash flow situation
    • If one is not readily available, create a simple cash flow statement (12 month cash flow template)
      • How much cash liquidity is currently available?
      • What bills are due in the next 30 days?
    • Not the time to rank importance or risk – this exercise is to get an objective view on paper
  1. Contact Landlord, Key Vendors, and Creditors
    • Transparency is key – having a good grasp on your cash flow situation (completed above) will allow a fact-based discussion. Realize that nearly every business right now is facing these issues and will need to work together toward a reasonable solution.
    • Discuss your current situation – be clear about fact-based potential cash flow constraints (more specific the better – shows that you have a good handle on your numbers)
    • Discuss with each key stakeholder potential solutions
      • Can you delay payments until cash becomes more available?
      • Can payment days be extended to provide more flexibility and time?
      • Are vendor/creditor partners participating in any relief programs that may be applicable to your business situation?
    • Document discussions – who, what, when, where – any agreements or commitments to follow-up at a later date
      • If follow up is required, get these on your calendar as reminders immediately
  1. Discuss what you are doing with partners or employees
    • Again, transparency is key
    • Let your key internal stakeholders know what you’re working on and what you are trying to accomplish
    • If the news is bad – facing work force reductions, closure, etc – be honest. Worst thing we can do right now is add to uncertainty
    • Document these discussions as well, especially any commitments made
      • Follow-up on any commitments made – key to maintaining trust
  1. Examine inventories, incoming orders and your overall supply chain
    • What is the unit count and dollar value of existing inventories? If a specific inventory does not exist, get one done and document holdings
    • In the event of a radical slow down – are there orders you can stop or send back
    • In the event of a spike in business – evaluate your supply chain to ensure they can handle any increase in business
    • Most importantly – TALK to your vendors…look for mutually beneficial solutions
    • Do you have existing on-hand inventories?
      • Will these inventories spoil?
        • If yes, look for opportunities to re-package and sell or donate what you can – document all donations
        • If not – do you have adequate storage to hold inventories
  1. Get outside of your proverbial box and think through alternatives
    • Take some time to think about current consumer needs and how you might be positioned to solve those needs
    • Are there ways to reposition your business to maintain cash flows during a challenging time?
      • Example – a restaurant I read about has converted itself into more of a packaged goods seller given that they cannot serve in the dining room – they are packaging current inventories into “cook-at-home” packages and allowing customers to pick them up
    • Put yourself in the customers’ shoes and think about what problems need to be solved right now…this is likely how you got into business in the first place. Tap into that entrepreneurial spirit and get creative here
    • Brainstorm without regard to worrying about next steps – get everything into a list, mentor partners can help sort through it with you

There are many more steps to be taken, question asked, and potential solutions evaluated but this short, quick list will assist you and your mentor getting on the same page quickly.

It often feels like taking immediate action in the face of a crisis in the right next step. Keep in mind though, that action without a well-thought out plan is like starting a journey with no map. Completing this first assessment will help establish some guidelines. Once we have a simple map, your SCORE Mentor can come alongside and assist you on this journey.

MidFlorida SCORE is funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.