Let’s face it, 2020 has been a rough year and many businesses are currently experiencing a cash flow crisis due to economic downturns and COVID. In an effort to help struggling businesses, our virtual chief financial officer, Marilyn Magett, has created a list of the top 5 ways that businesses can better manage their cash flow during these uncertain times.
- Adjust Your Business Plan
During a cash flow shortage, it’s important to examine your P&L statements and determine which areas of your business are most and least profitable. By doing so, you will have the necessary insights to adjust your business plan accordingly, which may entail letting go of minimally profitable clients, changing your pricing structure, and refocusing your efforts on what brings in the most profit.
- Accelerate Receivables & Negotiate Payables
Undeniably, the quicker money flows into your business the sooner your cash flow issues are mitigated. Some of the best ways our virtual chief financial officer recommends accelerating receivables is by asking new customers/clients for upfront deposits or initial payments, sending out invoices early and more frequently, following up on past due accounts, and offering numerous easy ways for clients to pay.
- Consider Borrowing or Selling Equity
By taking out a business loan, line of credit or advance, business owners can undoubtedly increase their cash flow. Similarly, working capital can increase by obtaining a partner or selling equity. That being said, it is highly important to pay attention to the terms and conditions surrounding both of these solutions and ensure you understand what you are getting yourself into.
- Reduce Expenses
During a time of crisis, prioritizing your company’s expenses is critical. As a result, you will want to eliminate unnecessary expenses and only spend on what is generating revenue and keeping you operational.
- Sell Superfluous Assets
Although it’s only a temporary one-time fix, selling hardly used or unnecessary items is a great way to raise cash!
Looking for more ways to improve your cash flow? Our virtual chief financial officer is dedicated to helping clients in financial crisis. For decades she has helped businesses successfully overcome economic distress. For more information and ways she can help your business during these unsettling times, please call 1 (888) 400-2148 or schedule a free consultation.
