I’m sure that you’ve been inundated with many blogs and articles with advice on how to manage/save your business during the COVID-19 crisis. To save you some time, here’s a summary of the recurring themes from the high-quality articles that I’ve seen in the past few days (not ranked by order of importance):
- Act now. Move as quickly as possible after a quick, but deliberate analysis of the situation.
- Develop a short-term and longer-term crisis management plan and procedures – who, what, when and how.
- Prioritize critical operations and cross-train.
- Conduct business virtually as much as possible.
- Make sufficiently large changes/cuts as necessary rather than a series of small actions.
- Over-communicate with everyone to reduce ambiguity and build shared understanding with customers, suppliers, employees, investors.
- Be transparent – share good news and bad news.
- Be compassionate, but the company needs to survive.
- Consider options such as layoffs, hour reductions/job sharing, furloughs, salary reductions.
- If salary reductions occur, they need to start with the owners and CXO’s.
- Be aware of potential owner liability for unpaid employee compensation.
- Review insurance coverage and contract terms.
- Provide leadership and financial, informational and emotional support to the team that remains.
- Understand and manage your cash position, burn rate and runway. Update and use detailed cash flow projections.
- Get as much cash as possible NOW. Draw on any lines of credit, loans or other cash sources.
- If your ability to deliver product has been reduced, prioritize your customer and product portfolio by margin, lead times and criticality. Evaluate the importance and vulnerability of each customer.
- Contact customers to confirm delivery schedules and payment of A/R.
- Contact suppliers regarding delivery schedules and potentially negotiate terms on A/P.
- Stay focused on what you’re good at. Don’t jump at possible new directions or products without vetting them.
- Seek input and share best practices with fellow businesses in your community or supply chain.
I’m sure that there are many more, but here are links to the sources of the information above:
Industry Week – Bracing for the Coronavirus Downturn: 6 Steps to Take Now https://www.industryweek.com/leadership/article/21124276/bracing-for-the-coronavirus-downturn-6-steps-for-companies
Steve Blank – The Virus Survival Strategy for Your Startup https://steveblank.com/2020/03/17/the-virus-survival-strategy-for-your-startup/
Sequoia Capital Letter to its Portfolio Companies – https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753
Action Today for CFOs https://steveblank.com/2020/03/19/action-today-for-cfos/
Drive Capital – Eight Steps Startups Should Take to Survive the Coronavirus Crisis https://www.youtube.com/watch?v=r4REEhp35yU
Center for Disease Control & Prevention (CDC) Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19) https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fspecific-groups%2Fguidance-business-response.html
Empire State Development COVID-19-Related Resources https://esd.ny.gov/esd-covid-19-related-resources
Jack McGowan, Project Manager at Insyte Consulting, works with manufacturers on business and strategic planning, Innovation Engineering, lean manufacturing, finance and ISO quality management systems. He also helps technology start-ups prepare for equity and grant funding. Jack is director of the Western New York Venture Association/Buffalo Angels, manages the WNY Business Development Fund and is the NYSTAR-designated Regional Specialist for SBIR/STTR funding. Jack is a certified Innovation Engineering Growth Coach, provisional ISO Lead Auditor and MEP Professional Business Advisor. Before Insyte, Jack was a commercial relationship manager and VP at Goldome, HSBC and Fleet Banks. He holds an MBA from the University at Buffalo and a BS from Cornell University.