In October 2008, I had a company doing $6mm and by March my future annualized revenue was dipping below $1mm.
I kept people on for too long – trying to do the “right thing” – hoping for the market to change.
In February 2009, I crunched the numbers and realized I was going bankrupt. I was taking down my company, draining my personal finances, and having no long term employment plans for my team anyway.
I let everyone go (and later discovered that by holding on to them, I had kept them from interviewing for other jobs that might’ve been available previously).
My partner was in dire financial straits. I had some savings so I took myself off the payroll and burned through my cash.
We barely survived (and happy to report I ultimately sold it).
I wish I had a plan that October. I would’ve done things so differently.
As an EOS Implementer, I am preparing my clients to look at things through a few filters to stress not looking too far ahead and taking care of things now:
1) Communicate clearly and effectively with everyone on your team. Don’t hide from tough conversations.
Take the advice from Mr. Rogers: “If it’s human, it’s mentionable. If it’s mentionable, it’s manageable.”
2) Document what your business will look like with 50% less revenue.
Who are the key people that stay no matter what? Who would have to go?
Then 40%. Then 30%…
3) Focus on the near term. Cut expenses NOW. Put project work on hold and makes those tough people decisions sooner than later.
“It is a mistake to look too far ahead. Only one link of the chain of destiny can be handled at a time.” Winston Churchill.
4) Slow down your APs. Tier them into the following:
(a) vendors we MUST pay on time, (b) vendors who are strategic partners, and (c) everyone else. Schedule these this week and let them know where you are. Silence breeds concern so be upfront. They’ll thank you later and may even extend terms even further if they’re well-capitalized.
5) Collect your ARs quickly by offering discounts if needed. Offer to take credit card payments (and eat the 3% charge to facilitate the transaction if needed).
6) For EOS clients, keep up your Meeting Pulse. Do NOT skip an L10 meeting or session days. Meet with your Implementer virtually. He/she will customize your meeting agenda to focus on IDS’ing the here and now. You’ll be glad you did.
7) Most of all, be calm and calculated. Be radically candid with yourself about where you are and where you think you will be for the foreseeable future.
Be a “Lighthouse Leader” – the light in the dark storm to those who need it – your team, your family, and your community.
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I’d like to help anyone in need. No strings attached, totally free of cost, to have a phone call to see how I can help you through my practical experience and EOS tools and resources.
Sometimes people just need a sounding board and I love being that resource.
Email me at james@jamesashcroft.com and we can go from there.