In This Episode
One of the things we have a lot of experience with is turnaround situations in business. A turnaround situation in our books is simply defined as taking a company that is losing money and turning it around to making a profit. Why is this important in the current Coronavirus/COVID-19 world?
For starters, most businesses have been completely turned upside down and/or shut down. That blow can be difficult to come back from for many business owners. Part of having a turnaround mindset includes one where you make plans in 90-day chunks. The mindset also includes being decisive and moving forward vs. being stuck in the past.
During the show tonight, Jack shared some great insights into this turnaround mindset which he developed in his corporate days, but really honed when he was buying and fixing up troubled companies. It starts with getting your hands around what is going on around you immediately. The next 90 days.
That means pulling together a Balance Sheet to see what you have in terms of assets (cash, accounts receivable, inventory, equipment) and liabilities (accounts payable, credit cards, bank loans, lease payments). Then you want to get a handle on new money coming in from sales and money going out in terms of expenses. If that picture is positive, then you have something to move forward with. If it’s negative, you have to keep working to get it positive which means doing things like negotiating with vendors and creditors to see who can provide some relief.
The biggest part of this turnaround mindset we want to instill in you is the importance of the next 90 days. If you have clarity and positive cash for the next 90 days you will be able to be the calm, cool, and collected leader your business needs. If you don’t have good visibility of positive cash over the next 90 days, it’s difficult not to panic.
People, Companies and Resources We Mentioned in the Show
- MVP’s 7 Keys to Success (https://maximumvp.com/7-keys-to-success/)
- Paycheck Protection Program Information Sheet (https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf)