IMMEDIATE BUSINESS SURVIVAL
Identify immediate steps to close a serious 'cash gap' arising under the following areas:
Quantify the impact
- Monitor cash movements of the business.
Determine the 'cash gap'
- Assess all available cash resources and lines of credit/borrowing against what would be required.
Prepare the 'cash gap' plan
- Determine the support available from the relevant government agencies.
- Adopt prudent cost management initiatives.
- Consider the temporary closure of non-essential operations.
- Release of finance from internal resources and key relationships.
- Identify the cash flow impact of the remedial action plan.
- Determine if additional funding would be required.
Prepare an information package that relevant government agencies and/or external funding parties may request for which may include:
- Latest financial statements/ monthly management accounts.
- Summary of the remedial action plan to close the ‘cash gap’.
- Revised cash flow statements based on the remedial action plan.
- Defined amounts required from external funding sources.
- Funding plan to sustain the business for a prolonged period (i.e. 12 – 18 months).
Engage and negotiate with external parties to agree appropriate funding arrangements.
Have the appropriate stakeholders to communicate the key elements of the plan.
PREPARING FOR THE DOWNTURN
Assess the likely impact of the crisis on the business under these key areas:
Sales volume impact
- What is the impact on sales volumes and demand?
- What are the implications on cash collection?
- Are key people likely to become unable to work for an extended period?
- Train and cross-train your staff to ensure work continues, and productivity remains high despite the absence of a key player
- Is there reliance on key suppliers who are likely to be disrupted, resulting in significant delays to delivery?
- Will key customers receive sufficient supplies?
- Are there restrictions on the use of facilities, and can your business model be adapted?
- Is it possible to carry out business functions remotely, such as payroll, finance or IT?
Legal and regulatory obligations
- Is there a danger of not meeting major contractual agreements and / or regulatory requirements?
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.
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