Improving Cash Flow Amidst Uncertainty

Keeping up with the uncertainty and change during an ongoing COVID-19 pandemic takes fast reactions and a passion for your business.  As the business owner, you are doubtless trying to protect your staff, your customers and your own safety, while you keep revenue flowing in.  Add an economic slowdown and a nationwide protest to the mix and you are facing some intimidating challenges.  At Americore, we don’t pretend to have all the answers, but we have been around for a few decades and have seen some great programs and creative solutions to problems.  The following shares a few ideas our clients have used.

During any slowdown, there are three traditional ways to manage reduced cash flow.

Reduce costs.  An employer once told me when cash flow was slim, cutting expenses could net him the same money as bringing in more cash through increased sales.  If you can reduce operating costs you can ease the strain of shrinking cash flow.  Make a list of every possible expense that could be cut, and when it is complete, look at the effect each cut would have on your business.  Remember that this may be a short term economy downturn, so before cutting human resources think about whether you will have enough trained workforce when the economy resumes. 

Prioritize cash generation.  In a downturn, there is still consumer demand, but you may need to shift your focus to direct it to your business.  By concentrating on products that you can charge more for, but which cost little, you may be able to improve your cash flow.  

A weight loss company changed its advertising theme quickly after the lock downs spread across the nation, to a warning message to men who were living on drive through food. “you know where that ends up.” The ad then showed them how easy it is to get their healthy meal plan food delivered to your home so you can heat it and eat it.  Customers could get in shape during the lock down, and emerge from it looking and feeling great.  It worked, and sales rose. 

Fashion companies went to work producing face masks to keep money coming in.  Brewing companies began making hand sanitizer to boost disappearing supplies…you get the idea.  Get creative on how to make your brand more relevant to the needs of your customers, even as those needs shift.  The following are some thoughts on other income strategies:

1. Go Virtual.  If your store is retail items, sell them in an online storefront that allows checkout directly on the website. Some business owners shifted their product line to include face masks, whether as a fashion accessory or as an advertisement/business logo opportunity.  If you have a gymnasium, yoga studio or martial arts Dojo, you can offer subscriber classes for your customers to train, stretch, or work out at home.
2. Re-brand for easier online sales.  Packaging is now more about delivery than about floor display.  Make it easy for your marketers to get your products to consumers.
3. Offer curbside pickup and delivery services for any kind of consumables, like grooming items or pet supplies.  Grocery stores and restaurants have been offering this for a few months now, but there are many more products that could be sold this way. 
4. Stay in communication with your customers.  If your hours, or business rules have changed, your website and social platforms need to reflect your new hours and other changes, such as mask and social distancing guidelines. 

Generating cash usually comes from sales but it can also come from alternative financing.  Give us a call at (747) 224-8110  to go over the possibilities.  There is no charge up front, but we think you will find the conversation invaluable.   

Empower your team.  You need them now, more than ever, and they need to know what is happening in your company.  By being transparent about your business goals and the metrics, you can motivate your team to help you preserve their incomes.  Sometimes it happens that a team is well intentioned, but they don’t understand those metrics.  You may be able to walk them through a sample P&L, so they understand the normal business balance between expenses and income.  When an employee volunteers a way to improve cash flow, show you appreciate the input, whether or not it can work for your firm.  You want to encourage good idea flow and the understanding of the impact of everyone’s job.

Americore has been helping business owners strategize through both rich and lean economic times and we can help your firm’s team with developing customized strategies for your situation.  Contact us or call us at (747) 224-8110  to open the conversation.  You’ll be glad you did.