Some Thoughts On Getting Your Business Through The Flood

A week ago, I posted an article on “Surviving the Flood“, picking up on an analogy from Jordan Peterson of the Biblical flood as a general symbol for chaos in our lives. That article talks about taking advantage of a short-term period of slow business to focus on strategic improvements.

Today’s article is more focused on short term issues: How do you get through what is inevitably going to be a tough cash-flow pinch? I was inspired to write this based on a conversation with a friend who is facing exactly that problem. He operates a small number of nationally franchised fast food outlets, and has seen his sales collapse in the last few weeks.

I don’t claim any particular insights or expertise, but I have been around for a while, and have been through periods of business slow-downs before, so I offer the following as general observations:

Remember That Nothing Last Forever

The current situation is temporary. How long it lasts is anyone’s guess, but eventually it will end. Personally, I’m guessing something like 60 to 90 days, with a heavy emphasis on “guessing”. I have no particular insight into the duration of this.

However long this lasts, remember that your business was making money before, and it will make money again. Don’t let the urgency of the present deprive you of a long term future profit stream. It might feel like the bottom has fallen out at the moment, and surely it has, but your business still has future value. Don’t give up on it easily.

Thin The Herd

Now is the time to take a good look at your portfolio of businesses. If some locations were marginal before, maybe now is the time to cut them loose. Years ago when I was just getting started, my accountant at the time (super-experienced old-timer who had been around forever) kept beating the “80/20” rule into my head. As in “80% of your headaches will come from 20% of your customers. Don’t be afraid to lose that 20%. They aren’t worth it.”

Same thing applies here. If you’ve got locations with performance levels that aren’t where they need to be, if you’ve got locations where you’ve spent the last few years thinking “I need to do something to improve those numbers”, you should take a hard look at whether those are in the “20%”.

Set Your Number

I’m assuming that the business will be cash flow negative for a period of time. You need to make a decision now in terms of how much cash you are willing to spend keeping them alive until things turn around.

I see this being important for two reasons: First, it is very clarifying. You are effectively establishing your “worst case scenario”, and staring it in the face up front. Once you know that number, you know the upper limit on how bad things can get.

Second, setting that number now takes the emotion out of the next few months. There will be bad days, and worse days, until things turn around. Knowing you’ve set a limit on your losses will make them easier to endure, and will help keep you clear-headed through this process.

Nothing says you can’t re-evaluate things in a few weeks or months. This situation will no doubt be highly fluid, and there’s no telling what things will look like on May 1. But for now, set a hard limit on your losses and give yourself some peace of mind.

Keep Your People In The Loop

This one is certainly the toughest of all. Your employees are the key to your success. There is no doubt they are terrified at the prospect of what is coming. It is likely that their short-term financial position is far worse than yours, so while you might be concerned about what things look like in six or 12 months, they are thinking “How will I pay my rent at the first of the month?”

There are hard questions to be answered. “Do I pay them out of my own pocket?”, “Do I lay them off now?”, “Who stays and who goes?”

I don’t think I can help you with that. Some business owners will try to keep their employees paid out of a sense of what you might call social obligation. Others might look to thin their payroll now in order to preserve the viability of the business. I don’t think I have much to offer on the moral considerations there. That’s between you and your conscience.

But I will offer that, at a minimum, your employees deserve straight talk, and (as with everything here), my advice is to not let your short term prospects cloud your long term vision. Part of your answer to “Set Your Number” includes the understanding that you’re going to probably end up over-staffed for a period of time. Make that decision and stick with it.

Look To Share The Pain

Take a look at your outflows and start negotiating. Suppliers, landlords, national franchise offices, banks, etc. You’re taking a haircut personally. No reason they shouldn’t take one with you.

As a general rule of business, I’ve rarely seen a situation where a business owner with a good sense of the business and a good plan hasn’t been able to negotiate better terms during tough times.


For example, if you are on Net-10 with your main supplier(s) today, have a negotiation where you try to take that to Net-30 or even Net-45. They won’t like it, but if you stay firm, you’ll get some movement in your direction. Never forget that their main interest is to keep you as a viable account moving forward.


Under normal circumstances, going to your bank with a “I’m in trouble” message is tough to do, but these are not normal circumstances. They already know you’re in trouble (everyone is), and if you’re in trouble, they are too.

There’s nothing bankers like better than open communication. If you’ve got debt service payments that are coming up, have a conversation with them. Bankers like numbers, so get with your accountant first and make sure everything is in good order. Maybe even bring your accountant with you.

Have a clear picture what you are asking for. Deferred payments for 90 days, for example. Be careful, though. Banks are always going to push for more security. Make sure you have a clear picture what they are asking for (if anything) and consider your position carefully.


There’s nothing wrong with having a conversation with your landlord where you tell them something like “I’m only going to be able to pay you half rent for the next three months”. Again, they may push back, but in the final analysis, they have every incentive to promote your long term viability as a tenant, and absolutely no interest in you shutting your doors.

I have some direct experience with those specific strategies. Back in the 2007/2008 “Great Recession”, we saw a fairly sharp decline in business at SpeedBinder. As it turned out, our lease on our plant facility was also coming up for renewal at that time.

I did my homework, and looked around at what equivalent industrial space was going for at that time. The numbers were well below the automatic renewal numbers built into my previous lease.

Armed with that information, I took my landlord out to lunch and explained my situation to him. The numbers were pretty tough. What I ended up asking for was not only lower than the previously negotiated renewal numbers, they were lower than the current lease.

Ultimately, I told him something like “I have to do this for the good of the business. Check around with your people. If you think my numbers are unreasonable, or if you think you can replace me as a tenant with someone else at a higher rate, lets have a conversation. But I think you are going to find that I am pretty close to the mark”.

A week later, he called me and agreed with my number.

Sell Through It

In times of business difficulty, we can’t just think on the expense side. We also need to think on the income side.

What opportunities do you have to expand your sales footprint? Remember, the key to business is helping people, and right now, people need help! What can you do to help them?

For any business that has historically been focused on retail sales, the obvious answer is delivery. What options do you have to add to your existing delivery offerings? Your existing delivery infrastructure (the employees, the communications systems, etc) are an asset you can re-deploy into other areas. I can’t answer that question for you, but it does seem like an opportunity for creative thinking that could open new avenues of opportunity.


We got through the 2007/2008 recession, and have seen steady growth since then. We will get through this coronavirus driven situation as well.

Set your number, be proactive with your employees and your vendors, make the hard decisions you need to make. I remain, as before, of the opinion that we will see a sharp rebound when all this is over.

As always, I would love to hear your thoughts. You can reach me at or at the phone number at the top of the page.