In the face of uncertainty in our personal lives and in our businesses, BluePrint Strategy is moving forward with a 30-day outlook and readiness to adapt as we learn more about COVID-19 and its impact. There are ways to prepare and to stay present within your businesses that will hopefully minimize the challenges that may potentially arise as a result of the continuing spread of coronavirus.
McKinsey issued a comprehensive analysis of COVID-19 threat to the economy (https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business). One of their seven recommended immediate actions for companies falls under “Financial stress-testing and contingency plan.” In my role as a strategic advisor, I felt it appropriate to share this resource along with my own recommendations to help you also cautiously navigate the next 30 days.
Here are specific and timely actions to consider for your business:
Review your budget – consider the impact that might come from a 20% reduction in revenue and realign expenses accordingly; reduce discretionary spending
Utilize your line of credit – maintain cash reserves; re-evaluate based on interest rates after 30 days
Create weekly cash flow reports – have your team regularly update these reports with a focus on AR
Understand your cash flow needs – this can help you identify what levers to change
Collect receivables – focus on getting customers to pay their bills sooner than later
Strategic planning – develop a business continuity plan across various scenarios and develop priorities based on business continuance
Virtual meetings & virtual team impact – transition from in-person meetings to online meetings (Zoom); calculate the costs and implications of a remote workforce
Consider client/employee risk management – identify scenarios related to risk management protocols and potential expenses
I consider the above recommendations to be “best practices” for financial preparedness in this uncertain time. Be proactive. Plan. Focus on the next 30 days. Do you want to gain a better understanding of your business? Your personal CashFlow Story © will give you a snapshot of your cash position. Contact Brittany Lorenzi at btl@blueprintstrategysolutions.com to obtain your free CashFlow Story © today.