Turnaround Tasks No.1 - GET THE CASH IN!

If a business is nosediving it has one overriding problem that will kill it in due course: cash.

If you cannot meet your obligations, you will go under. So if your business is struggling you should be focused on one thing: how to cover your cash requirement this month.

Forget your three year plan. Forget the mission statement. Forget the strategy. Quite frankly you can forget the P&L for the time being. You can take for granted that it will be bad - you can fix that in time - but fix the cash issue first or time is something you just won't have.

The first thing to do is cancel all discretionary cash advance purchases. Now. Just stop. How many things can you do without? Write a list. Communicate it. Get saving. Get used to it. It is going to become a permanent feature for the foreseeable future. Do you have any temporary workers? Say goodbye. Cut back. So you are going to let some customers down this week, deliver late. So what. If it takes less cash to deliver late this month then deliver late & then ask for forgiveness.

Right now your foreseeable future is counted in weeks not months. Adopting this mind set will get you and your team focused.

Second COLLECT THE CASH YOU ARE OWED. I am constantly amazed at how little attention businesses pay to credit control even when times are tough. Get on the phones, get everyone you employ on the phones if necessary and get paid.

If the bill is overdue. Be firm and ask for immediate payment. At the outside agree a payment plan with them. 50% this month is better than zero. 75% better than 50%.

For invoices that will be due during the rest of the month - get in early. When will you be paid? Are there any queries that can be resolved early? Solve them now and there is no excuse for late payment. Keep on top of every invoice until it is paid.

If necessary offer discounts for early payment. If your customer has cash they may want to use this to reduce costs. You don't have the luxury of this yourself right now.

Although in the very near future you are going to be relentlessly focused on getting your costs down, you should expect them to rise in the short term as you re-focus on running your business for cash, cash and cash. Live with it.

Third. Negotiate with your creditors. Get some time, agree a payment plan for current debt. Of course you will very quickly have to get back to paying to terms but surviving comes first. Buy some time.

Once you have the immediate next few weeks covered you can think about month 2 and month 3 of the crisis cycle.

It is not a turnaround until you turn the corner.

Until then it is a struggle for survival. You have maybe one or two cash cycles to stop the downward momentum and I would hazard maybe one more to show signs of stabilisation. If you are very lucky, and if you have your creditors and your bank on side.

To keep the bank onside in 2008-2009 you are going to need to demonstrate that you are in control, taking tough measures and dishing out the nasty medicine when necessary. Otherwise it won't be your decision whether your business continues or not.