2020 came in like a hurricane and it’s still stirring up the landscape nine months later. Unemployment is at an all-time high and consumer spending at its lowest. Any changes from this year’s election won’t come in time to get your business back on track. No one knows how to stop the storm and, with no end in sight, it’s time for businesses to adjust their plan for the final three months of 2020 to help recover from the effects of negative cash flow.
Solution #1: You can place the blame of your cash-flow problems on the current pandemic, but can you narrow it down more specifically? By having a specific list of issues that customers and vendors are facing, you can create targeted solutions and prevent future issues.
Solution #2: Take a look at your billing procedures and payment terms to see how long it’s now taking customers to pay. Collections can be difficult during the days of COVID-19 so rather open up discussions and make plans for bringing in cash—even short-term compromises. This step can keep your business P&L in the positive.
Solution #3: Reducing operating costs is both the most obvious and most difficult during a pandemic. List all your operating costs and evaluate each to determine if you can reduce or eliminate it. Next, shop around and discuss options with current and new vendors for better pricing and terms.
Solution #4: The best time for promotions is now! Increase revenue by hosting promotions and discounts that encourage customers to purchase in large quantities or to buy your old inventory and equipment you no longer need. Consider that while you may have something you don’t need; it could be just the thing needed to keep another business afloat.
Without a finite end in sight to the pandemic or the public safety measure in place, now is the time to rethink your approach to cash flow and management.
You can certainly find an in-depth thirteen-week cash flow analysis and plan online or you can reach out to your financial advisor and start a conversation—sometimes a fresh perspective from a trusted source is all you need. Call us at 561-705-2005 or email us at Michael@AskWealthCare.com or visit us at AskWealthCare.com and let’s have a conversation.
Adapted from CBIZ1
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