The COVID-19 pandemic and subsequent lockdown has caused disruption to varying degrees for most businesses. In such a situation it is important for businesses to take stock and create a business continuity plan. Assessing cash flow, credit and finances are a major component of this plan to ensure recovery and resilience of a business.

Here are some immediate action points for your business continuity plan:

• Assess your cash flow for the next 6 months (assume that only 30% of this is going to come)
  
  
• Assess your payables for the next 6 months.
  
  
• Will the inflow be enough to manage the outflow without dipping into the cash credit facility? If not, will you have to dip into reserves?
  
  
• Segregate the essentials and the non-essentials.
  
  
• Address all the large creditors in a positive manner. Speak to them and ensure that 30% will be paid to manage their essentials while the rest will be staggered.
  
  

• The suppliers should ideally be addressed positively as they are required to be continuously in good shape. But it takes two hands to clap and hence they should also understand the situation.
  
  
• Address the small creditors (both in terms of amount and their independent size) and see if you can pay them in full because they will be most affected.

• All the daily wages staff (contractual) should be positively addressed as these are the people who can be completely submerged. But if you can help them sail, it will generate trust and immense goodwill.
  
  
• This is a time when the whole industry should speak to each other and manage the same. Please speak to your bankers and ensure that they don't put too much pressure on churning.
  
  

Also read: An unprecedented challenge, also an opportunity for SMEs to do unprecedented things

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