Coronavirus Survival: How To Handle A Cash Crunch
The recent Coronavirus panic has prompted widespread uncertainty about the future of our economy. That uncertainty means many businesses need to prepare for a cash crunch. The most obvious businesses facing this problem are restaurants and theatres. Sales are going to be down, and in many jurisdictions the locations are shuttered to customers. Beyond that, buyers are backing out of real estate deals. And many people are delaying significant decisions based on fear.
Of course, there’s a world of opportunity for the businesses that stay disciplined and weather the storm. Although many businesses will see demand sink in the weeks and months ahead; it won’t go away forever. For example, in my own business, we help people who’ve been cheated in business and real estate deals get their money back. Even if these people delay going out and retaining counsel through March and April and even May, they’ll want to get their money back, and they’ll come see me eventually. So, there’s opportunity for those of us who survive. Other businesses will see a similar pattern; people who delay buying a bigger house will still want one in several months. People who see that the government is extending tax payments and don’t hire an accountant now will still need one within 90 days. The business will come back; it’s delayed, not lost.
On top of that, not all businesses will weather the storm. Some will shut down. So, the customers who come back when the pandemic ends will have fewer businesses available. That means even more customers for those who make it through. In other words, there’s a huge reward for those who can raise enough cash to keep their doors open now.
In support of that, here are a few steps to help raise cash and sustain your business right now:
1) Collect all the money owed to you from any source. Go through your books. Ask your bookkeeper. Find every customer and former customer who owes you money, and ask them to pay it. Try to collect as much as you can voluntarily. And don’t limit this to debts from your main business. If you’ve invested money in something and not seen a return, talk to the promoter. Ask for your money. At least ask for a distribution on profits. Find out whether the investment was a sham. Ask for books and records.
2) Retain counsel to help collect debts. There’s a segment of the population that won’t pay until you threaten collection. Moreover, people who previously refused to pay anything are likely to offer at least some settlement as soon as you hear from a lawyer. Even if you have to bribe the debtor for a partial payment by waiving the rest, you’re bringing cash in the door. That will keep your business alive to profit from the rebound that always follows a pullback.
3) Pick up the phone. Talk to potential customers who didn’t buy. Talk to former and recent customers. Just show you care about them. See what your business can do for them. This will give you top of mind awareness. And you’ll likely see a few additional sales come in.
If you can keep your business open through social distancing and the associated economic slowdown, you’ll have plenty of opportunity on the other side of the crises. You’ll quickly find yourself bigger and better off than you’ve ever been. So, keep a cool head and find a way to keep your doors open. And if you need help collecting some debt; I’m here. Pick up the phone and set up a consult. 480-616-9377