Cashlow in a Crisis - Top 4 Survival Tips
Sadly, even profitable businesses can go broke if they do not effectively manage their cashflow during the recession – and it’s happening across the country right now. Not surprisingly then, cashflow is one of the biggest challenges currently facing business owners, with some 92% reporting that they frequently experience stress due to cashflow concerns. If you’re like many of the business owners we’ve talked with recently, you may have had to reduce the scope of your operations, source additional funding, take a pay cut, or even make long-standing staff redundant.
It’s not all doom and gloom, however: the good news is that while cashflow may be the first to take a hit during a recession, it is actually THE KEY to surviving the recession. Implementing strategic cashflow management policies and systems can literally transform your business bank balance within a month.
The 10X network of accounting firms across Australia and New Zealand have been helping hundreds of clients implement effective cashflow management strategies and we’ve handpicked a few strategies that you can put into action in your business and see tangible results from straight away.
The 10X Top 4 Cashflow Management Strategies:
1. Set goal-oriented budgets and proactively manage them. Profit and Loss Budgets are still important but right now your focus should be on developing your Cashflow Budget, which will allow you to plan for your cash requirements and shortfalls in advance.
2. Focus on increasing sales and income – a feat that, even during a recession, is possible. Be proactive, provide real value to your customers and identify creative ways to increase your retention rate, generate leads, and increase conversion.
3. Avoid easy tactics like discounting, which can be dangerous to business profitability. Even a 10% discount can result in your business having to increase sales by 100% to achieve the same gross profit pre-discount.
4. Reduce your cashflow cycle by collecting debtors faster, selling stock more quickly, and negotiating longer credit terms with creditors. Putting in place systems like a debtor collection system, credit policy, stock control system and purchasing system will encourage inflows and put less pressure on the immediacy of outflows, freeing up more cash for the business.
Cashflow is the lifeline of your businesses, and with the right resources and support, you can turn around almost any cashflow situation or dramatically increase the current cash “buffer” in your business. At 10X, we know that this is a critical issue for business owners right now and we wanted to make sure that you too can benefit from the expertise of our expert 10X accountants.
As our way of supporting the local business community, we’ve decided to host a FREE “Cashflow in a Crisis” teleseminar so that we can share our top 4 strategies with you in much more detail.
During the teleseminar, we’ll take you step-by-step through the process of actually developing and implementing a workable cashflow management system for your business. We’ll also reveal a few “quick tricks” and tips guaranteed to produce results that are much easier than you might think! The teleseminar is our gift to you and is completely free of charge (other than your own outgoing Telstra call cost). You can register for the teleseminar and submit your cashflow question to our panel of experts by clicking here now.
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