Identify excess assets. What can you sell for cash? And remember: the quicker, the better. Do you have any extra cars, boats, planes, construction equipment, drill presses, injection molding presses, etc.? Go down the balance sheet, look at the equipment list, and examine the insurance policies. What don’t you need to survive? What can you rent instead of own?
There are markets beyond Craig’s List and eBay. Construction equipment goes to auction all the time. List that extra piece of real estate on MLS. Offer the broker a bonus for a quick sale. Tell him you’ll auction it (without him) if he doesn’t bring an offer soon. Find the most active internet sites that cater to what you’re selling.
What old inventory can you convert to cash? Can you sell it to a foreign customer? Is there an alternative market channel? Don’t be embarrassed to accept the accounting loss. Everyone but you has already recognized the lower value. Your goal is to get cash and survive.
Remember that the first mark down is the best mark down. This is true for inventory, land, equipment and most other excess stuff. Get rid of the old stuff, get the cash and move on.
I suspect you already sold any marketable securities and cashed in your life insurance policies, but did you sell your interests in other businesses? What about your time share? Your hunting camp lease? The second home? The boat? The sports car? The wife’s company car? The girlfriend’s company car? (Yes, we’ve seen these and more.)
Cancel the company credit cards. This will improve your control over spending since you are now signing for all spending (you already sign all the checks and have the bank statements sent to your home, right?) Canceling the credit cards might also improve your standing at the bank since their credit card exposure is now limited. It also sends a message that you’re serious about the business problem. Bankers love serious debtors taking serious steps to fix their money problems. And it won’t hurt your employees to note you are now a serious crisis manager.
Finally, look at the payroll register. Since you sold the boat, you don’t need the captain. Since your purchases are dependent on who will ship to you, maybe you don’t need as many people in the vendor qualification department. Maybe your brother-in-law really should begin his long-sought career change.
Letting people go stinks, but your business is struggling for survival, and you may not be able to save everyone. But if you don’t save the business, you won’t save anyone.
Do you have any questions? What have you had to sell off in the past that you didn’t want to? What ways do you free up cash in your business?