Business owners, I’m sure by now you’ve reviewed your business to stop the downward spiral it may be facing, but just in case you’re working (or scrambling) to keep your business open, over the next couple of weeks or so I’ll be sending out posts to help in five key areas. Today, let’s start with triaging the finances, since that might still be one of the most pressing areas. It takes a multi-pronged approach…
Have you started with an assessment of where you are? Have you thought about creating a report detailing the business you’ve lost as a result of this crisis? It’s probably not a report you want to create, but by comparing your numbers from last year to this year (same time frame for both), you’ll be able to project lost sales for part (if not all) of Q1 and Q2 (and possibly beyond).
Let’s look at the income statement – Q1 is in the books, and Q2 is happening right now. This crisis is disrupting just about all types and sizes of businesses – you may be finding yourself in a fight for survival, but how are you going to weather the storm? When the economy re-opens, will your Q3 and Q4 have a rebound effect for your business? How are you preparing for that now? Do you want to thrive or is the status quo sufficient?
Your balance sheet will most likely show some losses in your assets and/or equity (and perhaps some reductions in your liabilities). What actions are you taking to assess them? What assets should you liquidate? What liabilities can you reduce? Do you have the determination to rebuild what you’ve lost?
And if you prepare estimates for your payroll and benefits, including for your team members working remotely (and the technologies they’re using) as well as any expenses not deferred, your cash flow statement should give you a pretty good idea as to how much you need as a bare minimum.
By the way, if you need a recommendation for someone to help you with your books, let me know (firstname.lastname@example.org,, and no, it’s not me). That’s it for today – see you in a couple of days!