During a time of crisis, there are a number of important steps small- to medium-sized businesses can take to ensure they can withstand the storm. Below we have outlined a number of things you should think about over the next 90 days, and be sure to contact us if you need help. We do this all of the time and can help make sure your business will still be around when this is all over.

Cash & Liquidity Management

  1. Extend Payables: Start having discussions with your vendors and landlords now to defer and/or extend your payments. In the early days, many of these folks might be willing to extend flexible terms. If you hear no, keep asking. Also, you might be asked from your clients for the same flexibility, so it works both ways. Many states and local governments are either providing relief or are imposing restrictions on penalties right now.
  2. Credit Lines: Now is the time to draw the full amount from your credit lines in order to maximize your cash cushions. Consider asking for extensions.
  3. Defer Principal Payments: Ask lenders if you can defer principal payments, wave covenant tests for 2-3 quarters, and wave excess cash sweeps, particularly ones coming due with the completion of year-end audits. Ask your bank for one or all of these, regardless of whether you think you’ll need it or not.
  4. Revisit Seller Notes: Review terms, identify issues, and establish a communication plan coordinated with Board and counsel.
  5. Accelerate Receivables: This could be tough, but give it a shot. Some tips include asking new clients for a deposit or partial payment upfront; send invoices early and more often; focus on collecting past due accounts; and make it as convenient as possible for client to pay, including using online services.
  6. Dashboards: Build a daily and weekly dashboard of revenue and cash—institute daily bank reconciliations and daily cash checks between CEO and finance team (or weekly with your Board). This can illuminate cash activity and mitigate potential for fraudulent/unauthorized payments and surprises in cash position.
  7. Forecasting: Revise forecasting and stress test cash flows—build details 13-week (1 quarter) and 26-week (1/2 year) cash forecast and update it daily, if necessary, or weekly. Focus on cash management and covenants. Know exactly what levels of business performance will trigger a default or liquidity crisis.
  8. Deferrals: Discuss deferral of tax distributions with your Board, if applicable.
  9. Cash Infusions: Plan the need for cash infusion—beginning with your investors now if you foresee a possibility of needing to raise additional equity over the next 90-120 days. Setup the legal framework, have discussions with your Board about what it would look like. Have all of the relevant analyses, information and plans ready to go, if you need to act on it quickly.

Cost Management

  1. Staffing: Make decisions over the coming weeks on which members of your team to (1) lay off, (2) furlough (temporary leave of absence, unpaid), and (3) retain. Prepare to make decisions quickly in the next week or two.
  2. Freeze Spending: Prioritize expenses that keep you operational—mission critical—and generate revenue. De-prioritize investments and non-essential spending.
  3. Cuts: Identity what can be cut now vs. potentially be cut later if the crisis continues.
  4. Negotiate: Reasess costs and renegotiate prices with vendors and service providers. In this environment, everyone is trying to keep an income coming in, so it’s an opportunity to renegotiate everything.
  5. Compensation: Consider across the board compensation reductions—even if simply a deferral of salary to be repaid after recovery.
  6. Keep Informed: Stay informed of all new federal, state and local government programs, regulations and laws regarding sick leave, family leave and medical leave, etc.


  1. Regular Communication: Employees will look for leadership during this uncertain and scary time for them and their families. Schedule regular and ongoing updates to (1) key people and (2) the full employment team.
  2. Tone: Be conscious of your tone during the crisis, balancing calm with a sense of urgency—decisions will need to be communicated with limited information and quickly, without time to prepare. Remain visible, calm, caring and engaged—this helps preserve confidence in employees, customers, vendors, lenders, investors and stakeholders.
  3. Transparency: Be transparent and quick to relay any information about employee exposure and your consequent actions. Maintaining trust with staff is vitally important.
  4. Board Updates: Keep your Board in the loop—plan weekly updates and check-in calls or videos with your Board.
  5. Lenders: Maintain an open dialogue with your lenders—call and speak with lenders this week and stay in close touch with them. Perhaps ask for an interest-only loan for the rest of the year. Stay informed of new government programs and regulations that could help you.
  6. Suppliers: There might be delays, so keep in touch with your suppliers. Extend any payables and make sure to order any high-demand, mission critical supplies ahead of time.
  7. Customers: Prioritize your customer communication based on the size of the customers and/or potential opportunities to expand relationships during this time.
  8. Outward Facing: Consider putting out statements regarding “open for business” and steps being taken are being added to the website. Even if you’ve had to close your doors, but are still having workers work remotely, it’s good to remind everyone that you’re available virtually.

Business Continuity

  1. Extended Virtual Working: Plan to extend the remote work in the event that it becomes necessary for some or all of your team. You might need to implement technology like Skype or Zoom or Slack to keep the teams communicating. You should plan out new processes, meeting cadence, and information sharing to offset the loss of engagement in the office. Also not all staff will have familiarity with working remotely, or the use of technology, so plan some training and guidance on how to work productively from home.
  2. Backup for Some Workers: Plan for how to proceed if extended remote work is difficult or impossible for certain employees—identify who will not be able to return to the office or work remotely if they have younger children and prepare a backup plan for them.
  3. Risks: Consider risks from remote working including fraud and data breaches—review your data and financial security protocols (ie: VPNs might need to be required if employees are connecting from unknown networks). Consider validation options to guard against password fraud. Be on alert for fraud attempts and have a plan on how to handle them.
  4. Contingency Plans: Consider contingency plans for key personnel and who will take over their responsibilities. Potentially designate back-up leadership for key positions. Consider which members of leadership should be in the office, perhaps keep the key members silo’d from each other. What if you become disabled due to illness; who could cover the responsibilities?
  5. IT Support: Identify a vendor for backup IT support, in the event your current team is impacted or overwhelmed, for phishing scams, fraud or hacking.
  6. Remote Banking: Make sure that you and those with authority on your finance team are carrying their tokens, fobs or whatever devices are required to authenticate the user. Instead of having customers send physical checks, provide customers with online banking options like ACH, or provide your banking information for electronic transfers.
  7. Vendors: If supplies become unavailable during and/or after the shutdown, you should have backup vendors to provide input or services. Optimally those vendors would be located in different states or locations than your own.
  8. Insurance: Review your insurance policies and revisit all terms—stay in close communication with your broker and ask what others are doing. Consider policies you don’t have but could use. Get knowledgeable on business interruption insurance (when you can make a claim, and what documentation is needed or required). Understanding this ahead of time allows you to start creating the paper trail you’ll need down the line.

This isn’t an exhaustive list, but a good start. Our business advisory team and outsourced accounting team use these types of lists as standard operating procedures, so that when a disaster hits, our clients are ready to go. If you need help setting up your own crisis management plan, let us know. We’d be happy to help.

SD Mayer