You can’t deny the pain businesses big and small is in right now. When you talk about being disrupted, nothing has disrupted us worse than the COVID-19 virus. What’s more intriguing is this could be the “new normal” for the foreseeable future, even with vaccines now available. The fact is the majority of business leaders see a bleak future ahead; a survey done by no less than the Young President’s Organization confirms this.
Indeed, the chaos can overcome you. There are just so many factors that are beyond your control. The market is one. The danger is you could be forgetting to keep track of the basics of money management in such a turbulent time. You’re swept by it. And in the long run, put your organization to ruin.
Luckily, it may not be too late to be reminded. We’re hoping you can still salvage a seemingly detrimental situation. Below are three key steps you may have forgotten to take but should. At this time, there may not be a one-size-fits-all method to get back on your feet. That’s true. But we’re sure if you forget these three, you could be in hotter waters than we can imagine.
Never Forget Cash Flow
Money management is for everyone. It’s for every person and enterprise. The truth is we need proper money management now more than ever.
If you’re focused on other areas of business, such as sales and marketing, you cannot allow money management to be done haphazardly. Having someone else such as a finance manager look into these key things is a must.
In hindsight, the same can be said for a loved one who has dementia. While putting them under the care of dementia caregivers is wise, you may have to put someone to look over his finances.
The right health care can help treat and attend to the needs of one who has dementia or Alzheimer’s in the right environment, even at home. Take note, however, that as time goes by, patients affected with dementia have difficulty managing money on their own. Thus, many times, without proper money oversight, unscrupulous individuals could take advantage of memory loss and run away with the money with wanton abandon.
Indeed, financial liquidity issues are key to your business survival in COVID-19 times. In this regard, creating a 16-week cash flow forecast is wise. You should then stress-test this by looking at various worst-case scenarios to strengthen your forecast.
As much as possible, find ways to boost cash flow. Cash flow is king during these times. Not even profit on paper could trump that. You can max cash flow by offering substantial discounts on paying customers, for instance.
Hang on to cash for as long as possible. This means you will have to reschedule for a longer period the payments of outstanding expenses. Negotiate with your vendors and keep in mind they are in the same boat as you, affected by the virus.
Additionally, seek to enhance your liquidity with possible credit options such as a business loan. Small business owners, for one, are eligible for a low-interest loan via Small Business Administration (SBA).
Never Forget Liabilities
This is the time you tighten your belt. There’s no doubt about that. And one of the things that you should not forget is to put into writing your liabilities. It’s a mortal sin not to do so. Log them.
To note, effective record-keeping can ensure you get reimbursed on time for business insurance claims. Documenting your impacts and losses is a must at this hour of need. That way, you get to receive timely assistance from the government.
Don’t Forget Your Key Contacts
It’s easy for you to be reactive during these times. You are, in fact, affected negatively by the virus. And acting accordingly. But it would pay you big time to be proactive. Part of that is never forgetting your principals and key contacts.
Make sure you get in touch with your key business relationships. We’re talking about your suppliers, customers, and other partners that make your business whole. Get in touch with them. Call them. Be honest with them and ask them how they are doing.
Tell them your plan on how your enterprise can work with your key contacts to go through the pandemic. It may not mean much to you, but it will be much appreciated by these entities.
Speak compassion. When you do, you’ll find these relationships last longer than usual as they’re forged in fire. You should reap the benefits over time.