Here are a few tips to help small businesses keep more cash on hand during these difficult and uncertain times.
What can small businesses do to manage cash flow when there is no cash coming in?
Discuss delaying your company’s lease payments until you are back on your feet. Most leasing companies and landlords understand these are tough times and they do not want to lose your business and the future potential income, so have that discussion and find out what they can do to help you defer or operate without rent.
Banks are also open to working with you during this time and can also defer any loan or mortgage payments. You can also work with the vendors that you have to pay, maybe see if you can get terms extended, deferred or even canceled until you can get back on your feet. If you have vendors that owe you money, you may need to explain your position and work with them, they are most likely struggling also.
If you have customers that you have invoiced and they are slow to pay, work something out with them where they either pay you quicker for a slight discount or look into some kind of trade financing program to get cash quicker. Here at Crowdz we are working with small businesses to give them more options to manage their cashflow. You need to remember this is not an individual crisis, so there are a lot of businesses that have to do the same thing you are doing, so everyone understands your current position.
You need to be honest and upfront with your employees, communicate regularly during this time, you may have had to send them home on furlough or working from home with reduced hours, whatever your situation is, make sure to communicate with them so that you can retain them for when you can bring them back to full service.
Apply for government assistance as soon as possible to make sure your company is at the top of the list for any stimulus money or no to low interest loans. Don’t overextend your credit during this time and preserve as much capital as you can, to hit the ground running once the market stabilizes and rebounds.