When markets wobble, the businesses that stay upright share a few habits in common. They plan ahead, watch cash like hawks, and move early.
Let’s lay out some practical steps that help founders and small-to-mid business owners stabilise operations, protect jobs, and keep customers through any downturn.
Build a Simple Crisis Playbook Before You Need It
A crisis playbook is a short document that outlines who decides what, how to conserve cash, and how to communicate with staff, customers, and suppliers. It removes hesitation when time is tight.
- Write a one-page chain of command with backups for each role.
- List your top five risks by likelihood and impact, plus immediate responses.
- Pre-draft messages for staff, customers, lenders, and suppliers.
- Store critical contacts in one shared location with offline access.
- Review and update the playbook quarterly.
Protect Cash First, Then Profit
Cash is oxygen. Profit without cash will not keep the lights on. Prioritise visibility and control so you know exactly where money is going and how long it will last.
- Build a 13-week rolling cash flow and update it weekly.
- Separate survival expenses from growth expenses in your chart of accounts.
- Shift to weekly payment runs and require approval for any non-essential spend.
- Negotiate extended terms with suppliers and bring forward customer receipts.
- Park surplus cash in secure, interest-bearing accounts accessible on short notice.
Tighten Working Capital with Clear Rules
Working capital swings can sink otherwise strong businesses. Set simple rules that staff can follow without asking for permission.
- Invoice daily and send statements on the same day each month.
- Offer small prompt-payment discounts and charge late fees consistently.
- Standardise purchase order limits and require quotes for anything above them.
- Clear aged stock with targeted promotions or supplier buy-backs.
- Audit subscriptions and unused licences, then cancel what is stale.
Diversify Revenue Without Diluting Focus
Revenue concentration creates fragility. The goal is not to chase every dollar, but to reduce single points of failure while staying close to your strengths.
- Map revenue by customer, product, and sector to spot concentration risk.
- Package existing capability into two or three adjacent offers with faster sales cycles.
- Pilot one counter-cyclical service aimed at maintenance, compliance, or essentials.
- Build simple retainers for support and advice that smooth cash flow.
- Avoid deep custom work that drags delivery teams off core services.
Get Cost Fit Without Cutting Muscle
Cost control is not code for cutting quality. Focus on structural savings that do not weaken delivery or safety.
- Convert fixed costs to variable where possible, like outsourcing non-core functions.
- Renegotiate major contracts at set review dates using market benchmarks.
- Right-size your footprint with flexible leases and shared facilities.
- Freeze non-critical hiring and replace roles with process improvements where possible.
- Keep maintenance budgets intact to avoid expensive failures later.
Keep Customers Close and Communicate Clearly
In tough periods, customers value certainty and straight talk. Proactive communication keeps you front of mind and reduces churn.
- Reach out early with a short update on availability, lead times, and service levels.
- Create value-added content that solves immediate pain points.
- Offer practical payment options and small loyalty bonuses for on-time settlement.
- Survey key accounts for their outlook and adjust capacity accordingly.
- Track churn reasons and fix root causes rather than blaming the economy.
Strengthen Supplier and Lender Relationships
Suppliers and lenders are more flexible when they hear from you early and often. Treat them as partners.
- Share a trimmed version of your cash plan to support extension requests.
- Offer to pay smaller suppliers faster in exchange for improved pricing.
- Maintain covenant dashboards and notify lenders of issues before they ask.
- Set quarterly check-ins even when nothing is wrong.
- Keep backup suppliers for critical items and test them at small scale.
Access Capital Before It Becomes Urgent
Capital is easiest to secure when you do not yet need it. Build options so a short-term crunch does not become a long-term problem.
- Establish or increase bank facilities while metrics are still strong.
- Prepare a short investor pack showing your plan, margins, and unit economics.
- Consider invoice finance for specific contracts with reliable counterparties.
- Line up asset-backed options for equipment-heavy operations.
- Keep your financial statements current and clean to speed approvals.
Use Scenario Plans with Clear Triggers
Plans are only useful if they tell you when to act. Pair each scenario with a small set of triggers that automatically move you to the next step.
- Build Base, Downside, and Severe scenarios with revenue, margin, and cash impacts.
- Define triggers like revenue drops, debtor days, or stock cover thresholds.
- Pre-approve actions for each trigger, such as hiring freezes or price changes.
- Review scenarios monthly and refresh assumptions quickly.
- Communicate which scenario you are operating under and why.
Invest In Your People So They Can Carry the Load
Teams carry businesses through hard seasons. Look after them and they will look after customers.
- Be transparent about the situation and how decisions are made.
- Cross-train staff so critical tasks are covered during absences.
- Protect safety, mental health support, and fair workloads.
- Recognise small wins publicly and give teams autonomy to fix issues.
- Offer targeted training that improves immediate productivity.
Bringing It All Together
No single tactic guarantees survival, but the combination does. Plan in calm times, act early, and communicate clearly. Keep customers close, protect cash, and invest in the people and processes that deliver value. With these habits in place, founders and small-to-mid business owners can face shocks with less stress and more control, and position the business to come out stronger on the other side.
