What options businesses had on their cash flows during this unprecedented time. Where things are uncertain and businesses are embracing the impact of the plaque. Protecting and managing your cash flow is necessary and imperative during this time. Every business should know their numbers and what options you have to increase and improve your cash flow and thrive.
Planning for tough times is never a fun exercise; however, it is compulsory for every small and emerging business. Advance preparation will ease many of the challenges that can arise during difficult times. A period of economic sluggishness has set in and one does not know how long it will last. The good news is that putting in the hard work now and having a concrete plan in place will stand you in good stead in the future. If you run a tight ship during difficult times, you will be better prepared to benefit from the growth phase as soon as the dark clouds disperse.
How To Maximize The Inflows Of Your Cash Flows?
1. Call your customers and Increase your business accounts receivable collections, especially if your clients and customers are not directly affected by COVID-19 situations and you know that they have the capabilities to pay your company.
2. Apply for CARES Act, SBA Payroll Protection Program (PPP) and any other government loans available to your business.
3. Increase your business line of credit, talk to your banker and lenders and ask to extend and increase your credit line.
4. Negotiate and defer your pre-existing loan payments prior to COVID-19 and ask for flexible payment options.
5. Revisit your income statement and figure-out the unnecessary expenses that you can get rid of. For example, canceled the unnecessary subscriptions and other expenses that will reduce your monthly expenses.
6. Ask your Landlord for flexible payment options, payments deferment and negotiate for discounted rent.
How To Maximize The Outflows Of Your Cash?
1. Call and negotiate with your creditors and vendors and arrange for payment terms. Ask for payment deferment from the net of 30 days to 60 days term of payment.
2. Restructure loan payments, pay off your small debts and consolidate.
3. Focused on expense reduction since it provides you a much more immediate number than working on increasing your revenue nowadays.
4. Be gentle with your employees and know how to handle it with care. Be creative and compassionate, everyone needs resources on this challenging time but also do not forget that your business should stand, braced and thrive during this difficult time. Considered given your employees fewer working hours, furloughs and direct them to government employee assistance programs.
5. Make sure that you receive the most cost-effective pricing from your suppliers. Negotiation and bargaining are going to be incredibly important when it comes to keeping costs down.
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