Strategic advice on successfully managing during turbulent times like now

1. Successful Navigation in
Turbulent Times
Presented by
Alliance Advisory Group, LLC
www.allianceadvisorygroup.net

2. Successful Navigation in Turbulent Times
• A study from Bain and Company found that only one of seven
companies is able to achieve sustainable and profitable
growth.
• Studies indicate that 75 percent of small businesses fail within
the first five years due to a lack of direction and limited
knowledge of the competition, the marketplace and the
economy in general.
• Based on our twenty‐eight years of business advisory
experiences PLANNING, DIRECTION and EXECUTION
differentiate excellent organizations from just good or even
mediocre ones.
www.allianceadvisorygroup.net

3. Successful Navigation in Turbulent Times
• Considerations for your organizational planning:
– Identify your core mission and capabilities
– Clearly define your value proposition
– Conduct an honest organizational evaluation (people,
processes, markets, products, etc.)
– Focus on core competencies and stay disciplined
– Plans should provide for being able to react quickly to
changes in the external environment
– Develop internal execution processes that support your
overall plan
www.allianceadvisorygroup.net

4. Successful Navigation in Turbulent Times
• Operational Execution Considerations:
• Processes/Procedures
– Review/document everything that gets done in the company
– Pay special attention to activities/actions touched by more than one
person/department
– Clearly communicate roles/responsibilities
– Build accountability into the system
• Systems
– Create your systems around functions/activities, not people
– Make functions repeatable
» Automation/Technology
» “Standardized Customization”
• Reporting
– Identify what you want to measure and define benchmarks
– Identify how the data to be measured will be captured (internal systems vs.
external systems)
– Presentation (Spreadsheets, Scorecards, Dashboards/web resources)
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5. Successful Navigation in Turbulent Times
• Financial Management Execution Considerations:
– Planning
• Profit and Loss plan
– Best, expected and worse case scenario's
• Cash Flow plan
– Same as above plus identify potential funding sources to fill any negative gaps
• Capital Acquisition plan
– Timing and capital access resources
– Ongoing Management
• Financials ‐ Profit & Loss, Balance Sheet and Cash Flow statements
• Budget variance reports, by department, comparing actual to budget by
revenue and expense category
• Accounts Receivable aging by customer (credit considerations)
• Accounts Payable aging by vendor
• Key Performance Indicators (i.e. liquidity, productivity, profitability,
leverage, growth)
www.allianceadvisorygroup.net

6. Successful Navigation in Turbulent Times
• What if you are in “crisis” now?
– Crisis's typically arise in area of cash flow
– Assess the nature of the crisis; understanding
what you control and what you don’t
– Obtain complete and accurate information for
assessment
– Be realistic in your approach to crisis management
– Seek help, don’t hide
www.allianceadvisorygroup.net

7. Successful Navigation in Turbulent Times
Steps in managing a cash flow crisis:
1. Prepare/update cash flow projection
2. Determine cash short fall (timing and extent)
3. Managing cash inflows:
– Sell to clients who pay
– Pre‐bill/Job deposits
– Invoice for work more frequently/Discounts for quick payments
– Collect by credit card/ACH debits/remote deposit services
4. Managing cash outflows:
– Extended terms with vendors
– Pay vendors on agreed terms, not beforehand
– Review all expense items
5. Outside sources of cash:
– Banks, leasing resources, factoring
– Federal, State & Local Government resources (direct loans, SBA, economic development,
etc.)
– Personal and family resources (home equity loan, credit cards, retirement accounts)
www.allianceadvisorygroup.net

8. Successful Navigation in Turbulent Times
Questions??
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