By Bernie Dixon

With so many factors cropping up for the CEO as you maneuver through a company survival plan it can be overwhelming. In previous survival tips, I have stressed the importance of preserving capital, adjusting forecasts and rewarding long term employees. I recently discussed with Brandon Shelton, Founder and Managing Partner, Task Force X Capital (TFX), specific tips to help early stage CEOs get through this challenging time. TFX is a military veteran-led advisory and venture capital firm focused on growing seed and early-stage startups which are led by military veterans. Brandon is the type of venture capitalist that every early stage company needs. He works alongside his portfolio of founders and CEOs to drive success. He shares his expansive contacts and resources freely to support his portfolio 24/7. As an Army officer, Brandon knows leadership and brings it to TFX’s portfolio companies beyond the traditional VC firm. When Brandon offers advice, early stage companies benefit by heeding his words. Brandon and I put our heads together to create this valuable list of survival actions.

  • Get clarity on your true operating expenses. Salaries are one of the biggest components along with facility rents or mortgage costs. Dig deep to understand all your expenses. Cloud services, data management fees, marketing fees, and more. Take a serious look at what is absolutely essential for your company right now. Assume everything else can be cut. Get rid of egos and biases on your cost structure. Slash everything you can immediately.
  • Assume your 2020 sales forecast is massively disrupted. Unless you are producing medical supplies for healthcare professionals, your sales forecast is well short of your pre-pandemic expectations. No herculean effort by your sales team can overcome the lack of demand for your products at this point in time. Even if your customers need your product, there is so much disruption in supply chains, distribution channels and sales channels, it is highly unlikely that you can sustain anticipated revenue.
  • Examine your Accounts Receivable. This is the time to assume drastic disruptions on your customers’ ability to pay. Hope is not a strategy when it comes to managing your cash flow. It is highly likely that your customers’ ability to pay will be deterred. Take personal accountability for managing a daily accounts receivable review. If you currently don’t accept credit card payments, consider a change. Accepting credit card payments will ease the payment process and help to eliminate risk in collections.  NOW accounts is another consideration for managing cash flow using their services to collect for you for a small fee.
  • Move to tracking your cash weekly. Join your CFO in weekly discussions and checks on your cash position. Your Board and investors need to recognize your progress and actions on a weekly basis. Understand your cash needs for the next 12 weeks. Update the outlook every week. Consider if you have loan payments due, supplier payments, or rent, for example, make plans to cover the essentials. Take actions now.
  • Assess all possible, external capital resources:  Have you applied for the appropriate SBA or local emergency loans or funds where you are eligible? This is an important time to tap into the SBA Disaster Loan Program.  Consider a small, inside investor capital raise; consider a small, well priced bridge round with outside investors. Leave no stone uncovered in pursuing external capital.
  • Work through a “Doomsday” Course of Action thought processes.  What are you willing to do from here to keep your business afloat thru Spring 2021? Cutting executive salaries, outsourcing software maintenance, and returning to Founder-led sales are all on the table. Consider the necessity of a “Go-Dark” period to cut costs to zero for a set period until you can reestablish a revenue stream. Is it time to consider a merger in your industry in order to create one surviving stronger player? Everything needs to be put on the table for consideration. Your sole focus needs to be on the survival of your company.

These actions are necessary to address your survival as a business. This is the time to step up as a CEO and understand the magnitude of the challenge and your role to lead your team. Get this mostly right and you have a chance of getting through this period. Have no fear of acting. You may make a few errors along the way. Your plan and set of actions will not be perfect. It does not have to be. Your team, partners and investors are counting on your leadership.

Play this for a win.

Bernie P. Dixon is Founder and Chairman of Launchpad2X, a founder-to-CEO accelerator training program for women entrepreneurs. Find her on LinkedIn.