In this market, it’s critical to understand your cash flow and monitor how it is changing. Here are key areas to review now for improving cash flow management during the pandemic.
Identify opportunities to consolidate and pull back on expenses, but don’t mess with your biggest or most important suppliers. Look at your physical space needs and see if you can reduce storage or clutter. Negotiate for longer terms or additional value where possible.
Cutting people isn’t the only option. Look at alternatives such as reducing hours, modifying pay and bonus structure, and role switching. Don’t lose good people, but let go non-performers.
Monitor cash flow daily
A monthly report is no longer good enough to keep you on top of your cash flow management. On a daily basis, review what you’re collecting, expenses, reduce inventory and postpone purchases where possible.
Change pricing structures
If Covid circumstances have required you to modify how you deliver your services, you need to review your price structure. For example, if a cleaning service takes extra sanitizing steps, then the charges need to reflect added time and supplies. On the other hand, if business is slower due to the pandemic, consider adding value while maintaining your margin.
Remember cash is king
The sooner you get the cash the better. Extending credit isn’t an option. Offer services such as Venmo and QuickPay with Zelle. If you offer a product or service, offer payment on your website.
Marketing is essential
Don’t take away from your marketing in your efforts to trim expenses. You still need to get the word out and give folks something to remember you by. In a less crowded market, you will find growth opportunities.
Homework: If you haven’t already, I strongly recommend you review every single expense and determine what is not essential, with the exception of marketing.
If you would like a complimentary coaching session during this pandemic or you have any questions about this blog, please send me an email.