When the novel coronavirus hit in full force, many people had to dip into their safety net to get by in the near term, while others were forced into full panic mode.
Entrepreneurs were forced to plan for survival and act quickly to mitigate the damage to their businesses.
Having a Crisis Response Plan is one of the most beneficial processes a company can have. Not only will following a succinct checklist allow the company to stay focused and proactive on appropriate next steps, employees have a better chance of being safeguarded.
Here’s a checklist that was compiled by Deloitte to better guide companies:
Manage Your Supply Chain Risk
Supply chain management and services can be risky as is. When financial turmoil is added in, it becomes a completely different mess. It’s important to monitor which customers are also facing financial trouble. This clarifies who can and can not pay for the products you deliver. If international product delivery is involved in finances, make sure the letter of credit you receive from international buyers is still valid and reliable. Not only is it important to understand the financial risk your own company will face, but also keep an eye on your business partners. You always want to make sure your partners are assets and not liabilities.
Make Sure Your Offered Financing is Still Reliable
In times of economic turmoil, banks are taking the responsibility to adjust consumer’s credit limits. This is why it’s important to make sure that the financing that was once offered and made available, is still in tact. And if you need more, research your options.
Understand Your Cash-to-Cash Conversion Cycle
Don’t just understand it, but know it like the back side of your hand. This requires paying attention to inventory, payables and receivables. Applying a diligent approach to mitigate losses will help with minimizing working capital requirements.
Look Into Alternate Revenue Streams
This doesn’t mean it’s time to start a new venture (please don’t). What this does mean is that there’s opportunity to branch out to domestic markets if you’re solely international, or changing how your assets are used on a daily basis.
Think Beyond the Four Walls and Have an Across the Board CFO Mindset
What this emphasizes is the necessity to think beyond company assets, and supply-chain processes. It’s important to know how your partners, assets, investments, and cash flow are doing. This means having a CFO mindset that is widespread throughout the company.
Covid-19 has caused an unpredictable amount of financial stress. As it has spread, large companies have been forced to shut their doors temporarily, while small and local businesses have faced darker consequences.
While times may be stressful, a lot of companies are doing their best to help the community. Insurance companies like Geico and USAA are giving customers back 15% of their premiums. Other companies aren’t penalizing individuals for late or missed payments.
For individuals who aren’t business owners, the same checklist applies. Different terms of course, but having a budget and abiding by it is important.
Knowing that options such as student loan relief, unemployment (although nearly impossible to apply for through the workforce commission site), and other tax relief options can be beneficial when everything seems consumed by chaos.
Here are some resources and bank programs that are currently in place to help during these turbulent times:
- Bank of America has deferral payment programs in place for customers with mortgages, credit cards or any other line of credit
- American Express is waving interest and late payment fees
- Chase is extending payment due dates and also waiving fees
- Citi Bank is pausing minimum payments and for eligible customers and business, allowing credit line increases
- Capital One is waiving interest fees
- Discover is helping with late payments and waiving fees
- If you’re a business owner, the SBA Loan could be beneficial
- Mortgage assistance programs through several lenders
- And student loan payment deferral options
Whichever way you decide to go, it’s important to make note that while there are programs built to help clients and customers, there are just as many if not more scams as well. Be careful when selecting programs, and do your research, because what seems to be the most enticing, may not be beneficial.