MANAGE CASH

In the best of times, cash is king.  For those still doing business trying to protect your cash position is really important as that will give you the firepower to outlast this pandemic and the slowdown in the economy.  Whether you have a lot of cash, a little cash or no cash in the bank it is necessary to start to work through this checklist to manage your cash.

Covid Cash Checklist

1. Cut Expenses
   1. Make a list of every expense that you currently have and cut out every single thing that is not absolutely mandatory for the next few months (or until we are on the other side of the shutdowns).   This could include items like:
      1. Subscriptions
      2. Memberships
      3. Vendors
      4. Inventory on order
      5. Marketing
      6. Ad spend
      7. Planned travel
2. Defer Payments
   1. This is an unprecedented time where not paying your bills is actually the responsible thing to do.  It might feel wrong or bad, but it is important to immediately call all of the following people to start to negotiate and plan for deferred payments.   Note that most of these organizations are going to be announcing plans for payment deferral or complete forgiveness so just know that if you stop making these payments now the regulations and economic stimulus packages will catch up.  Don’t worry.
      1. Rent – call your landlord and tell them that you need help with rent payments.  If they are a large organization ask for an outright waiving of rent.  If they are a small company and fellow entrepreneur work together to find a way to protect you both.
      2. Taxes – check your federal, state/provincial and federal tax agency websites.  Most countries impacted by Covid are already announcing deferred payments for all small business owners.   Work with the tax agencies directly and your accountant to understand what has already been approved in legislation.  Call your tax agencies to discuss deferments for any taxes that you owe or will have coming due that are not already waived or deferred.
      3. Utility Bills – call all of your utility companies and explain that you are a small business owner and need help with your payments.  Ask for a waiving of their fees for 90 days.  If they do not approve that then ask for a deferral on any payments due or coming due.
         1. Power
         2. Water
         3. Phone
         4. Internet
         5. Cable
      4. Insurance – call your insurance company and ask them what their policy is to help small business clients through this period.   Ask if they are waiving payments or if they are prepared to defer your payments until a later date.
      5. Loans – many banks and lenders have already started to release statements saying that they will not be collecting on any loan payments, they will be reducing fees and doing some debt forgiveness.  Check your bank and lenders websites to see if they have already issued their Covid response plan.   If it is not clear or if any of your loans do not apply to their existing plan call your bank ASAP and talk through your options to defer loan payments and potentially access more capital.   Note that the banks and lenders are going to be working with the government to create billions of dollars of capital to be put back into the hands of small business owners.   Watch this closely so that you can get access to the most possible support.

Recommended Cash Management Resources

We will be adding to the resources available on Managing Cash through this crisis on an ongoing basis as new information becomes available

Brent Beshore from Permanent Equity – wrote this really helpful article on how to think about cutting expenses

Scott Connors – wrote a very helpful step by step guide to understanding your realistic cash position