Sherrill Lester is the President of QMF Steel, Inc. and has seen her business through the 2008 economic crisis and the aftermath of September 11th. During these challenging times many companies struggled to stay in business due to a rapidly changing dynamic in our country. Today she has provided helpful insights that she learned along the way that directly resulted in the success and strength of her company.
Tips on Seeing Your Business Through a Crisis
- Cash Flow – We have all heard the saying that “Cash is King”
- Offer your customers a discount if they pay in the next 5 days and ask your bank for a payment deferral or even refinance at a lower rate with payment deferral.
- Keep a journal and write down all unusual expenses as a result of COVID-19 and share with your insurance company. (Ex: What and why did you spend? Why was this essential?) Insurance may cover it.
- Create and financially plan for a Plan A, B, and C. Can you last 3 months or 1 year?
- Banking/Lending – It is in your banker’s best interest for you to make it through this, ask for their help and guidance on what others are doing during this time
- Do not change banks for a while because they have your credit file. A new underwriter will have to get to know your history and your business plan.
- Ask for payment deferral or refinance at a lower rate with a payment deferral. Ask for the kitchen sink and see what costs/fees they will waive.
- Having access to cash is important; do not pay off your line of credit. See if you can get your name off the personal guarantee to protect your assets.
- Supply Chain & Your Customer’s Customers – Don’t leave them hanging
- Create a working process for both you and your suppliers by splitting up orders that are smaller and a few days apart to meet expectations. Or lean on the terms of your strongest contracts to continue a successful relationship with your vendors.
- Questions to ask when being contacted by a customer who had great credit but has lost their customer base: How are they going to pay you/how will payment be secured? Are they getting credit cards for the order? Can they make a deposit? Are they making sales or actually supplying another customer?
- Your Company – Get lean.
- STOP doing things that do not make you money.
- Outsource a non-essential function to someone who is willing to help pro-bono.
- Think about the future you WANT TO HAVE, not the future you thought you would have.
- Pivot and research new markets and product demands that have been created in response to this crisis. Keep an eye on your industry through blogs, articles, events, etc.
- YOU, the Business Owner – You can always start over in business.
- If you loan the company money, create a note that will be paid back with interest even if it is a year later, it needs to be in the books.
- Only refinance/get money or equity out of your properties if you intend to keep the property for an extended period of time. Personal net effects borrowing capacity now and later.
- Talk to other business owners. Everyone has creative ideas to share. Something could spur an idea that changes your direction. Or try getting quiet, sometimes the best ideas come when you are not thinking. Let the spirit do its work.
- Risk Mitigation – Your effort today will be more important than being perfect.
- There are situations that may not be your fault but could affect you if you aren’t making an effort to mitigate the risks you know about. Don’t end up in a lawsuit.
- Make priorities with the mindsight that they will change as you move forward. Focus on the largest risks and rewards not fighting fires.
- Get EVERYTHING in writing from EVERYONE.
On a final note, unless a law changes, you can navigate anything that comes your way. Listen to your gut and get your OWN information. It is great to have mentors and consultants, but they are not running your business, you are.
Best of luck and blessings to everyone, being a business owner is a gift and we positively affect employees and our supply chain when we are successful. DON’T GIVE UP.