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Finance plan in recession

You know how to respond to covid19 situation in your personal capacity but have you thought of "How your business should respond to covid19?" In this article i have provided guide on what areas needs to be addressed by each and every entrepreneur along with available responses for business in current situation.

In times of recession it is advised to follow complete defined process to limit the loss and better utilization of resources. I have covered major departments of almost all business and what needs to be considered by business in response to covid19. I would be keeping it to the reader to relate it to their own business; as directly relating to multiple business would be difficult in a blog, but yes you will get key areas that needs to be addressed by you,

1. Sales and Sales management:

  • Do you have defined sales process starting from lead generation to after sales services? (No process earlier? have it from today)
  • Identify your key accounts from your current client tele (as a percentage of total revenue; say 5% or more revenue contributor) - You cannot afford to loose them. (Have lucrative plan to retain them.)
  • Sales training program as to what should be communicated to clients and what not
  • Redefine sales activities and measurable performance for each employee and segment
  • Reward employees more with variable pay than fixed pay, this is not to cut their salaries but to motivate and highlight how important it is for business to balance between sales costs and sales numbers. (earlier say 10% incentive, make it now say 15%-20% of sales)
  • Revise your sales plan from say "Rs. 1 crore in month 1" -> to make it "Rs. 1 crore in month 4" (*it is very subjective but yes you need to revise the sales plan as per your industry)
  • Payment terms with clients: One needs to keep margins low and rely high on advances or cash business; as risk of default is high.
  • Sales growth plan should be adopted keeping the sales costs low


2. Financial management

  • Better working capital management by constantly monitoring your cash to cash conversion cycle
  • Make budget for coming six months and keep plan ready for how it will get financed (Change your sales plan accordingly)
  • Ageing analysis of your receivables to be reviewved on weekly basis
  • Define your break even point upfront and Keep track of your breakevn point regularly
  • If you have any investor in your business, decide on business plan together
  • Define measurable financial goals to check your progress and respond to the same (Say you are in service business and you achieved your sales for month of 1 crore for consecutive three months, its time to hire new team member to keep quality of service intact for new customers)

3. Human resources plan

Before starting i would like to share a small real story of one corporate in recent times,


Father was running group since 30 years, his young son joined business since 5 years. Business was suffering big time losses and situation beyond control for management. Management had to consider decision for partial layoff. Son said,"No we won't remove any one" but father told him " As of now we are talking about layoff for 10% employees, if we dont do it today we may not have funds to honour other 90% also and we have to default 100% of them, would you do that?."  Yes we should give them proper notice period so that their life is not affected.


This is just example in front of you,hope you dont have to face such situations. Idea is to bring to your notice that sometime you have to take tough decisions also.

  • Do you have REVISED written JD for your employees (Increase responsibilities to optimize resources)
  • Revise targets and increase reporting intervals to monitor on continuous basis
  • This is right time to link people more towards variable pay and link them more to performance to company (not just for bad times but also for good times in coming future)
  • More defined policy for performance bonus for junior/mid-level employees, ESOPS for HOD
  • Involve HOD more in management decision to respond to current situation
  • In terms of salary cuts
    Business Situation Top level Mid level Lower level
    Not affected Some cut to keep reserves for business No change No change
    Affected Higher cut to keep organization sustainable Some cut to keep organization running Reduction in allowance and bonus (full basic pay) 
    Affected badly Salary should be forgone only drawings on need basis should be allowed Higher cuts considering situation of employee Minimum wage should be offered to survive 
    *Employees also understand the situation, all the decision should be taken with one to one discussion with employee either with HOD or management directly. 
  • HR plan should be made in line with sales plan and finance plan
  • BEST THING TO DO IS, Consider additional investment (if possible) in business now as promoter; to yield higher returns when business starts recovery phase (Studies shows that those who invested in tough times got maximum returns). In addition to returns you won hearts of your employees, who will improve on their performance.

Apart from above three departments, you need to make plan for other departments or revise them. Given current situation it's better to take calculated decision to yield better results. Lastly, would like to highlight, you cannot have same responses to same situations in different scenarios.  It is right time to have complete redefinition of your business model.

Hope this blog helpful for you to respond to covid-19 situations. In case of any query feel free to comment below of reach out on


1. Situation differ from business to business and not recommended for any specific business.

2. This article is just provided as options available to respond to current situation and options are not exhaustive.

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ITR filing GST filing Accounting outsourcing services Hope this article helped you with information on Sales plan in current situation, HR plan in Covid, Finance plan in recession. Feel free to ask query with a click of button.