HOLY #@X&^%*!!!! (Feel free to fill in with whatever string of expletives work for you.) And we all thought Enron was bad.

This is bad, and it is not going to get better anytime soon. State budgets are getting cut, companies are foregoing any big capital outlays, banks won’t lend you a dime, and vendors are dubious about extending credit. This time around it’s not just the struggling companies that are going to go down — some solid decent companies are going down too.

In the midst of all of this you still have a company to run, one that you would like to see still standing when all this passes in three to five years.

What to do in the short and medium term to weather this perfect storm of finance?

First, manage what is in your control. You can’t change the stock market. Banks (those still standing) are over-cautious. Easy credit is no more. You want a loan? Good luck!  Ask your vendors to extend you more credit? No way! But you can manage your costs.  Look at your top 10 biggest expenditures every month: Payroll? Material? Trucks? The warehouse? Make a list and start trimming.

You don’t have to wield a machete. Small cuts to your major expenses (5%) can make the difference between being solvent and really struggling. If business is down, there is no reason for anyone to be clocking overtime. If you still need to bring down the payroll cost, get creative with the employees you want to keep. Some employees may be enthusiastic about working a 32-hour week for the next three to six months. (Perhaps they have a small child at home or a sick parent.) If there are a few employees who haven’t been performing, there’s no reason to keep them now. Cut back on health care. Most any employee I know would prefer having a job with less health care than no job (and no health care). Oh yeah, dump all the freebies and other bennies — for employees, customers, vendors, whomever. Freebies consume badly needed cash and they aren’t getting you any more loyalty.

It is time to consider repairing trucks rather than replacing them. Step up the maintenance program so your trucks will last a little longer. Regular tune-ups and weekly checks of the tire pressure will save on gas. Implementing rules like “no idling” at a client’s site will help too. Set up a challenge to your drivers: Each week the one who used the least amount of gas gets some reward.

Now is the time to get very close to your favorite vendors. Pay them on time. Work with them such that you are not an expensive, time-consuming, late-paying customer. If you can help them save money (scheduled deliveries, on-time payment, etc.), they can pass a little of that savings on to you.

It seems hard to imagine how you are going to save money on the warehouse. Start by using less of it. Shut off those parts of the warehouse that are infrequently used. Why heat or light an area that no one goes into? Rent out that excess space if possible. Now that’s a total cash win. (Save money AND make money.)

Look at your existing inventory. When business was booming it seemed OK to keep lots of material on hand. Now you can cut your stocking amounts by 10% across the board.  You will get a one-time bump in cash and you will have a larger section of the warehouse you can shut down.

We’ve all heard the expression, “Cash is King.” It’s much more than a snappy phrase. In times like this, you don’t want to be caught inventory- or warehouse-rich and cash-poor.  You can’t pay your employees in valves or pay the rent in pipe. Cutting costs results in cash going directly to the bottom line — and right now it is ALL about the Benjamins.