Company Restructure Emergency Steps
Company restructure procedures that you must take if your firm is running
out of cash.
Take Complete Control of Spending
Starting today, you should not allow your employees to spend any money
without your authorization. Do not approve any outlay that is unnecessary
for your firm’s survival.
Stop All Payments except Payroll
For the next one or two weeks do not allow accounting to send a single check
to your vendors. This will give you time (and enough cash) to come up with
a cash forecast and plan.
You need to understand exactly where your cash is coming from and going
to. Then you must forecast how and when you will pay your vendors. (The
best information on how to do this is in the Dan Betts’s
Insider Secrets to Saving Your Business. He gives you detailed
instructions on how to run your business without much cash. Click company
restructure handbook to read about this turnaround bible.)
Put All Vendors On a Payment Plan
From your forecast work, you should have decided how much and when you can
pay your vendors. You should call your vendors and let them know your plan.
You may be nervous doing this, but usually your vendors are happy to know
that your firm will pay them something.
Slash Operations and Headcount to Meet Available Cash
Likely, your cash forecast will show you that you still have “cash
holes” that you need to overcome. To fill these holes, you will
have to cut valued employees and unprofitable operations. My advice is
to do it quick and compassionately.
You can usually carry out the emergency steps above in a few months. Afterwards,
you need to create a well-thought out turnaround plan. See the company
restructure handbook to get more information on how to do this.
This handbook has everything you need to stop the cash hemorrhage that your
firm is facing and then shows you how to rebuild your business.