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How To Survive A Cash Crisis

If your company gets into financial difficulties, don't panic. First, try these steps espoused by Multi Financial Services Inc. chairman Gerald C. Meyers, former chairman of American Motors Corp.

* Shorten payment terms for favored customers. Cutting back from 60 to 30 days will buy a month's worth of cash.

* Tell suppliers frankly where things stand, and convince them to lengthen your terms; paying in 45 days instead of 15 buys another month.

* Sell nonessential assets.

* Drop frills such as first-class travel and club memberships.

* personally monitor your cash position daily -- how much is on hand, how much will be spent soon, what the remaining level will be over the next 10 to 30 days.

* Think only in terms of cash production; close down cash drains.

* Forget long-term strategies; figure out how to make it to the end of the month.

* When things are partially stabilized, draw up a six-month plan and look for new sources of cash -- the most vital step to moving ahead. Be prepared to relinquish some control.

* Shed your loser image and project yourself as a viable competitor to employees, suppliers, lenders, stockholders, and the media. Proclaim the company's vision of the future.

* Relax your concentration on cash -- it's time to show a profit.

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