Author: Niall McGinnity, CEO @ Nuvem9
Much of my advice – and blogs – has a focus on preventative measures, but what happens when factors beyond your control mean you have to take action, and fast?
Depending on the severity of the symptoms, there are a range of escalating measures you can take, focussing on short term gains through to long term realignment.
To consider the right approach, let’s focus on a real life example.
How Marvel Studios Avoided Bankruptcy and Built a Billion-Dollar Empire
In the 1990s, Marvel Entertainment was on the verge of financial collapse. Despite owning a treasure trove of intellectual property, the company had over-leveraged itself with bad deals and, with declining comic book sales, by 1996 Marvel filed for bankruptcy.
However, rather than accepting defeat, Marvel followed a strategic series of decisions that are a textbook guide on how your business can recover from a cash crisis:
- Immediate Cash Wins: Marvel sold the film rights to key characters like Spider-Man and X-Men to the large studios like Sony and Fox; this sale of IP generated fast cash. (Scroll down for Step 1: Quick Wins – Impact in Weeks)
- Process Restructuring & Smarter Deals: Instead of continuing to licence characters cheaply, Marvel then secured funding to self-produce its own movies, controlling the lion’s share of the revenue generated. (Scroll down for Step 2: Medium-Term Adjustments – Impact in Months)
- Strategic Reinvestment & Growth: With the success of Iron Man in 2008, Marvel started to build a long-term franchise strategy, leading to the Marvel Cinematic Universe (MCU), which is now valued at over $25 billion. (Scroll down for Step 3: Strategic Changes – Impact in Years)
The Key Lesson?
Marvel’s turnaround didn’t happen by chance. It resulted from quick financial wins, the impact of medium term restructuring, and the impact of the right long-term strategy. They didn’t panic or make desperate cuts that would have hurt future growth. Instead, they rebuilt step by step, always in line with the strategic direction.
“Heroes are made by the path they choose, not the powers they are graced with.”
~ Iron Man, Iron Man (2008)
Implementing Marvel Techniques to Your Business
Step 1: Immediate Actions – Quick Wins (Impact in 7-14 Days)
Chase Outstanding Invoices
Action: Identify overdue invoices and follow up fast and assertively. Consider offering incentives for early payment (e.g. small discounts for immediate settlement).
- Impact Timeline: Cash in 7-14 days.
- Pros: Quick cash injection without new costs.
- Cons: Relies on client cooperation; may not be enough alone.
Slow Down Outflows
Action: Review upcoming supplier and tax payments. Where possible, negotiate extended terms. Prioritise payments for essential expenses first above everything else.
- Impact Timeline: Immediate reduction in cash outflow.
- Pros: Provides breathing room without external funding.
- Cons: Some suppliers may resist, damaging relationships if overused.
Cut Non-Essential Spending
Action: Pause discretionary costs such as software subscriptions, training, travel, or marketing spend that won’t immediately impact revenue generation.
- Impact Timeline: Immediate savings; full impact in 30 days.
- Pros: Retains cash with minimal external dependencies.
- Cons: Short-term relief; doing this too long will harm future growth.
Step 2: Medium-Term Adjustments (Impact in 30-60 Days)
Improve Payment Terms on New Sales
Action: Move from long-term payment cycles (e.g., 60+ days) to upfront deposits, phased payments or reducing terms down to 14-30 day terms.
- Impact Timeline: New deals improving cash flow within 30-60 days.
- Pros: Reduces future risk and normalises healthier cash flow practices.
- Cons: May require renegotiation with clients and could delay deal closures.
Adjust Pricing or Offer Fast-Pay Incentives
Action: Introduce a premium for clients paying upfront or within shorter terms. Conversely, offer small incentives for early settlement of future invoices.
- Impact Timeline: New pricing models reflected in cash flow within 30-60 days.
- Pros: Strengthens financial discipline and future cash position.
- Cons: Some clients may push back, requiring clear value communication.
Review Team Utilisation & Capacity
Action: Ensure your team is fully billable and eliminate inefficiencies. Consider minor restructuring if necessary.
- Impact Timeline: Financial impact in 30-60 days.
- Pros: Creates operational efficiencies while preserving revenue potential.
- Cons: Requires careful execution to avoid overloading key staff.
Step 3: More Significant Strategic Changes (Impact in 60-90 Days)
Renegotiate Supplier and Overhead Contracts
Action: Revisit office leases, software contracts, and outsourced services to lower recurring costs.
- Impact Timeline: Savings materialise over 60-90 days.
- Pros: Permanent cost reduction, making the business more resilient.
- Cons: May involve upfront renegotiation efforts or minor termination penalties.
Restructure Debt or Seek External Financing
Action: If the shortfall is larger, consider a short-term loan, invoice financing, or restructuring existing debt.
- Impact Timeline: Cash available within 30-90 days, depending on the lender.
- Pros: Provides breathing room for continued operations.
- Cons: Increases financial obligations and potential interest costs.
(Bonus) Step 4: Emergency Measures – Critical Situations (Immediate to 30 Days)
Emergency Cost Cutting or Payment Freezes
Action: If cash is dangerously low, freeze payments temporarily and negotiate with creditors while implementing a rapid turnaround plan.
- Impact Timeline: Immediate stopgap measure.
- Pros: Prevents default in an extreme scenario.
- Cons: Damages relationships and requires a strong recovery plan.
Pivot or Partial Exit Strategy
Action: If cash flow is unsustainable long-term, consider selling assets, merging with another agency, or pivoting to a leaner business model.
- Impact Timeline: Major shift over 90+ days.
- Pros: Ensures business survival if no other options are viable.
- Cons: High complexity and emotional strain.
Final Thoughts
A shortfall in cash flow is not the end of the world, but ignoring it could be. The best companies act early, decisively, and systematically, starting with the least disruptive solutions and escalating only if necessary.
Marvel’s journey from bankruptcy to blockbuster dominance shows that the right financial strategy can turn even the worst situations around. They didn’t just survive; they aimed higher, had the confidence to stick to their strategy and ultimately they thrived.
The same applies to your business. If you see a cash crunch coming, take action now. If you want to discuss more, get in touch, and let’s build a cashflow roadmap.
“Do not wait to strike till the iron is hot, but make it hot by striking.”
~ William Butler Yeats
Main Image Credit: Photo by Alvaro Reyes
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