If your company is in dire straights and you’re headed to oblivion, below are some of the basic things we can do to extend our competitive company life – our ‘runway’ as it’s often called.
The most important activities are communication and following-through. Communicate to staff why we’re in trouble and what we’re doing about it. Communicate to customer and assure them Work In Progress is going to be finished. Communicate to vendors that the problems are in hand and payments will be made.
- Identify current cash burn rate
- Identify the core business and where the CEO is taking the company
- Keep shareholders and stakeholders informed
- What are the outstanding billables/Work In Progress
- What projects can be completed in the short term
- What new customers can we identify
- What does the current P&L/Balance Sheet look like?
- Accounts receivable – chase them up TODAY by phone
- Accounts payable – negotiate a restructured payment plan – better for vendors to get paid over a longer period than not at all
- What staffing structure do we need
- Identify the current key problems and who owns them – what are the bottlenecks
- What projects and products can be deferred
- Identify an approach to trade out of our problems
- Make sure you handle the comments and rumors on forums and social networks
- Speak with credit providers – can we extend our overdraft or Line of Credit
- Speak with non-Bank finance – Angels, VCs
- Walk through scenarios with customers
- Ask for a stay in repayments with other creditors
- Look at current commitments – speak with landlords, service providers etc
- What areas of the business are not generating profit – what can be outsourced
- What strategies are low priority or have long term horizon profitability planned?
Of course if you have a product or service no one wants, this will simply put off them inevitable. But if you just need more time with your product or service in the marketplace, these actions will help keep you there.