Today’s 7-Point Small Business Survival Plan

by | Apr 22, 2020 | Business, Unexpected Issues

“Show me the money!”

Jerry Maguire, 1996

A Cash Flow Crisis

For business owners, the Corona crisis means either fewer or zero customers while business and personal expenses continue. It’s a cash flow crisis!

Right now the only rational objective is to build a plan. Where to start is the question. I created the following 7-Step Plan to help jump-start your strategy…


Everyone Has a Plan Until….

If you were planning to retire soon, that may now be in question.  If you are in the early stages of your business, how are you going to generate cash flow?   Cash is the blood that fuels a healthy business.  Without cash flow a business literally dies.  Suddenly this pandemic has put your livelihood and retirement on life support.


1.  Assess Your Business Financial Health

The start of any life support system is assessing the current health of the patient.  Here, assessing the financial health of the owner of the business is step one.  Have you been saving for this very rainy day?  Can the business alter the way it does business to somehow keep customers and create some cash flow.

2. Assess Your Personal Wealth

How much of your personal wealth are you willing to risk on keeping the business alive? Are you willing to take some of your life savings and put it back into the business? This likely will depend on how far along you are in saving for retirement and how confident you are in your future success. After all, this is likely not the first calamity you’ve faced and conquered. The answer to one question often dovetails into the answer to another of the questions outlined here.

3. Assess Your Savings Asset Allocation

How safe are your assets during the current market downturn, and what, if anything can you do to rearrange the investments? As a business owner, your reserve cash and personal wealth is your primary go-to bank. Of course, any existing traditional bank relationship will also need assessing to determine if loans can be acquired.  Here, too whatever government support is available becomes another possible lifeline. A total financial health checkup is part and parcel of building a plan of action.

A key question is how to approach your personal assets in terms of buckets to be invested for the short-term and long-term. During market meltdowns opportunities arise for long-term investors. An analysis of how much to put into safe assets and how much to invest more long-term is key to both securing the present and the future.

4. You’ve Been Here Before. Be Confident.

Owning a small business is both fulfilling and treacherous. It’s like being a row boat in a big ocean. Events act like powerful waves that can capsize any business, large or small. Generally, the longer you’ve been in business the better the odds of surviving an economic crisis. I know this because since my early 20’s I have had numerous businesses and suffered many ups and downs. That experience brings a wealth of know-how on what not to do….which invariably leads to reasoned action on what, in fact, to do. You already know all that because you have been here before many times, so be confident in your assessments.

This crisis affects finances, retirement, estate planning, and tax planning. It’s hard to assess which of these and other legal issues are more important than others. For a business owner all of the factors blend together as each issue in its own way bears significance to your future. At different life cycles of a business some issues may dominate others.

5. Decide to Retire or Fight On

Coming to grips with the hardest question of all is whether it’s time to call it quits, or fight on. Here you have to know in your heart whether you’ve saved enough to call it quits. The answer to that question is a product of hypothetical calculations of what your lifestyle expenses will be, the return on your capital invested, and how likely you will be to have enough for the rest of your life and that of your spouse and loved ones.

There is now plenty of time on your hands start running some projections. Start with your personal wealth to see if you are financially fit to retire and stop working. Then run some hypothetical calculations for the business. How much money you can pump into the business? What are the possible outcomes from best case to worst case? You may find sobering projections that need to be tweaked to see different results with different assumptions.

6. Risk Analysis is Crucial

Before making any decisions you must analyze the risks inherent in any of your options. Every decision carries with it an element of risk. Step 5 (Decide to Retire or Fight On) really works hand-in-hand with Step 4 (You’ve been here before. Be Confident). Planning for worst case scenarios is safer than looking through rose colored glasses. Someone has to analyze where the risks lie with every hypothetical scenario. While the future right now is uncertain on so many levels, an owner cannot make decisions based on uncertainty. You need to draw a map so that you have a way to measure and confirm, or revise, a plan of action.

 7. Assess Your Team

It’s likely that you have a current team of accountants, lawyers, investment advisors, insurance agents, realtors, and maybe even a therapist or two. Yet, with all those professionals there may be another one out there who can bring more value for your advisor dollars.  Exploring options sometimes leads to better results.


Schedule a phone call to discuss ways we can work together. 

Let us help!