Managing Through Crisis: Playbook for When Everything Goes Wrong

Every Business Will Face a Crisis

It is not a question of if. It is when. A key employee quits without notice. A major client disappears. A natural disaster damages your equipment. A pandemic shuts down your industry. A lawsuit lands on your desk. A cash flow crisis threatens payroll.

The businesses that survive crises are not the ones that avoid them. They are the ones with owners who respond effectively under pressure. According to the SBA, roughly 25% of small businesses do not reopen after a major disaster. The difference between the ones that survive and the ones that do not usually comes down to leadership in the first 72 hours.

Phase 1: Stabilize (First 72 Hours)

When a crisis hits, your first job is to stop the bleeding. Not solve the problem. Not figure out blame. Just stabilize.

Assess the Damage

Before you do anything, understand what you are dealing with. Answer these questions:

What exactly happened?
Who and what is affected?
What is the immediate financial impact?
What is at risk if nothing changes in the next 48 hours?
What resources do you have available right now?

Write the answers down. Crises create fog. Having a written assessment gives you and your team a shared reality to work from.

Protect Your People

Your team is watching you. If you panic, they panic. If you go silent, they assume the worst. In the first 24 hours, communicate directly with your team:

What happened (facts only, no speculation)
What you are doing about it
What you need from them
When you will update them next

You do not need to have all the answers. You need to show that you are in command and have a plan to figure it out.

Preserve Cash

In almost every business crisis, cash is the lifeline. Immediately:

Review your cash position and runway
Pause non-essential spending
Accelerate any receivables you can
Contact your bank about available credit lines
Identify the minimum monthly spend to keep the business alive

You can always resume spending later. You cannot get cash back once it is gone.

Make the Hard Calls Fast

Crises often require decisions you have been putting off. A crisis gives you both the urgency and the cover to make them. Cut that unprofitable service line. Let go of the underperformer you have been carrying. Renegotiate that bad contract. Do it now.

Phase 2: Adapt (Weeks 1-4)

Once the immediate danger is managed, shift to adaptation.

Scenario Plan

Build three scenarios for how the crisis might play out:

Best case: What does recovery look like if things go well? What needs to happen?
Likely case: What is the most realistic outcome? What adjustments do you need?
Worst case: What happens if things get worse? What is your minimum viable business?

Having all three scenarios prevents both dangerous optimism and paralyzing pessimism. You can make plans for the likely case while having contingencies ready for the worst.

Communicate Relentlessly

During a crisis, there is no such thing as over-communication. Update your team weekly at minimum. Talk to your key clients personally. Be honest with your vendors and suppliers -- they have seen crises before and most will work with you if you are upfront.

The information you share should be:

Honest: Do not sugarcoat. Your team can handle the truth. What they cannot handle is finding out you lied.
Specific: "Revenue is down 30% this month" is better than "Things are tough."
Forward-looking: Always include what you are doing about it and what comes next.

Protect Your Core

Identify the 20% of your business that generates 80% of value. Protect that at all costs. Everything else is negotiable. If you need to cut services, cut from the periphery. If you need to reduce staff, keep the people who drive your core revenue.

Look for Opportunities

This sounds tone-deaf, but every crisis reshapes markets. Competitors fail. Customer needs shift. New problems emerge that need solving. The businesses that come out of crises strongest are the ones that spotted the opportunity inside the disruption.

Ask yourself: What can we do now that we could not (or would not) do before?

Phase 3: Recover (Months 1-6)

Set Recovery Milestones

Define what recovery looks like in concrete terms. Is it revenue returning to pre-crisis levels? Is it stabilizing at a new normal? Set monthly targets so you can measure progress.

Rebuild Deliberately

Do not just snap back to the way things were. Use the crisis as a forcing function to rebuild better. Every process that broke during the crisis is a process that needed to be stronger. Every gap that the crisis exposed is a gap that needs to be filled.

Support Your Team

Crises take a psychological toll. Your people are stressed, possibly burned out, maybe dealing with personal impacts of the same crisis affecting the business. As the acute phase passes, check in individually. Be flexible. Recognize the extra effort people gave. The loyalty you build during hard times pays dividends for years.

Conduct an After-Action Review

Once the crisis is truly past, gather your team and debrief:

What happened and why?
What did we do well?
What did we do poorly?
What would we do differently next time?
What systems or resources do we need in place for the future?

Document the answers. The lessons you learn in a crisis are expensive. Do not waste them.

The Crisis Toolkit: Build It Before You Need It

Do not wait for the next crisis. Build your preparedness now:

Emergency fund: 3-6 months of operating expenses in accessible cash
Key person documentation: If any single person disappeared tomorrow, could someone else pick up their critical tasks?
Insurance review: Annual review of coverage against realistic risk scenarios
Contact list: Key advisors, attorney, accountant, banker, insurance agent -- with personal cell numbers
Communication template: A pre-drafted crisis communication framework you can adapt quickly

The best time to prepare for a crisis was a year ago. The second best time is today.