Crisis management: a guide for owners and chief executives

When a crisis begins: signals and diagnostics

A crisis almost never comes out of nowhere. Three to six months before it really starts to hurt, the business is already sending signals. The trouble is that the owner sees them — and convinces himself it will pass. It doesn't.

• Revenue falls 20%+ for two or three months in a row
• Margins are compressing — you can't raise prices, or you're forced to cut them
• Cash gaps — not enough money to settle with suppliers
• Key clients are leaving, or major contracts are collapsing
• Debt to banks or suppliers is growing

The first 48 hours of a crisis: how to act

Step 1: Admit there is a crisis

Strange as it sounds, this is the hardest part of all. Until you call things by their names, you're treating the wrong illness. Take the numbers in hand: how much cash is in the account right now, who you owe and how much, what comes due over the next three months.

Step 2: Stabilize cash flow (24 hours)

• Accelerate receivables — revisit clients' payment terms
• Defer non-essential spending — halt purchasing, cut marketing
• Negotiate with creditors — ask for a payment deferral
• Check your credit lines — is emergency financing available

In the first 48 hours of a crisis, every day can cost millions of roubles in lost revenue or added expense. Act fast.

Step 3: Assemble the team (within the first hours)

• Call an emergency meeting of the company's leadership
• Show the real numbers; don't hide how deep the problem runs
• Define ownership: who is responsible for sales, for costs, for cash flow
• Set daily check-ins for the next two weeks (every morning)

A 30-day action plan

Week 1: Diagnostics and stabilization

• A detailed analysis of why the crisis happened: market forces, strategic missteps, operational problems
• A cash-flow check for the next three months: how much money is needed each day
• Calls to your top 20 clients: confirm the status of contracts and whether they intend to leave
• A review of the cost budget: what can be cut without losing the ability to operate

Weeks 2–3: Cost management

• Cutting variable expenses (marketing, travel, consultants)
• Negotiating with suppliers on lower volumes and prices
• Reviewing payroll: are reductions possible with minimal damage to the company
• Honest conversations with the team: explain the situation and the path out

Week 4: The exit plan

• Defining the target state: what size you need to scale to, what margin you need to hold
• Revenue-recovery initiatives: how to win clients back, which new channels to open
• Exit metrics: weekly cash inflow, revenue, average ticket

Recovering revenue during a crisis

You can't survive a crisis on cuts alone — trimming costs only buys you time, it doesn't bring the money back. In parallel, you have to fight for revenue:

Save the clients who are leaving

• Call your top 20 clients personally (the CEO or head of sales)
• Offer special terms: a discount, flexible payment terms, a dedicated account manager
• Ask directly: why are they considering leaving, and how can you help
• You can usually retain 30–50% of clients who are already in exit conversations

Fast sources of revenue

• Excess inventory: can you sell stock quickly, even at the cost of some margin
• Closing loss-making lines: if some clients carry negative margin, stop serving them
• New clients through existing ones: ask for referrals, offer a bonus for introductions
• Price optimization: you may need to raise prices on your most profitable services

Negotiating with creditors and investors

The conversation with the bank

• Be honest about the situation — banks respect that far more than concealment
• Show an exit plan with specific numbers
• Propose restructuring the loan: longer terms, lower interest
• If you have collateral, offer to re-pledge it

The conversation with investors

If the company has investors:

• Flag the crisis at once; don't wait for the reporting period
• Propose a plan: where you see the routes out
• Discuss additional financing: are they prepared to invest in stabilization
• Be ready for investors to want a change of management — sometimes that is the way out

Keeping the team through a crisis

When layoffs come, the best people are the first to leave. How to keep them:

• Honest communication: tell the truth about what's happening, but show a vision of the way out
• Layoffs: if they're unavoidable, announce them early and give people time to adjust
• Fair terms: severance, references, the chance to find a role in another department
• Retaining key people: offer a bonus for staying through the crisis (typically 20–50% of annual salary)

When to bring in consultants

Sooner or later there comes an evening when the owner admits to himself: I can't pull this off alone. Here are the signs that it's time to call in outside help:

• You're losing control of cash flow — you don't know where the money is
• Cuts aren't working — revenue is falling faster than you can reduce costs
• Conflict within the team: people don't believe in the exit plan
• Creditors or investors are demanding a change in management

A good consultant closes three things at once: works out where the problem came from in the first place, charts the route out, and — most important of all — drives the plan through to real action rather than leaving it as a handsome presentation.

If this sounds like your situation — see how we do this as a service: crisis management consulting.

Conclusion

Those who come out of a crisis stronger aren't the lucky ones — they're the ones who stopped playing for time. Who named the problem out loud early, didn't hide the numbers from the team, and did more in the first 48 hours than in the previous quarter. And who remembered one simple thing: you cut costs to survive, but it's revenue, not thrift, that brings a company back to life.