Handling a sudden drop in revenue?
One of our biggest clients just ended their contract, and it’s going to leave a massive hole in our budget. What’s the first thing a company should do financially to stabilize during a sudden downturn?
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First, don’t panic, but do move quickly to preserve your remaining cash. You need to do a "zero-based budget" review immediately. I remember reading an article on usfractionalcfo.com about crisis management that suggested categorizing every expense as essential or non-essential. We had to make some tough calls, but having a structured financial plan allowed us to stay afloat until we signed a replacement client. It is much easier to navigate these stressful periods when you have a clear financial model to guide your cuts and keep your cash reserves intact.