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Business cash flow is easy to define, more difficult to maintain, and almost impossible to achieve during a global pandemic. Dave Thibault, Senior Vice President of Cash Management at PeoplesBank, recommends that business owners take a break to better understand and manage cash flow to position them for future success.
Managing cash flow involves several variables, and Thibault suggests that companies that manage these variables tightly will have a better idea of what their business success looks like.
Here are four tips that might help you move forward with cash flow management.
- Reliable forecast.
Hope you’ve spoken to your banker and taken advantage of Small Business Administration (SBA) loans and grants. If not, stop reading and call your banker for advice. There is, however, light at the end of the tunnel which makes forecasting and activity planning more accurate. Now is the time to start speaking out loud and out to everyone and looking for new broadcast channels.
- Talk to your suppliers about discounts, deferred payments and more generous payment terms.
“We’re all in the same boat” was our mantra at the start of the pandemic. Those of us who are still in business have understood this. We are all in the same boat. Therefore, you might find a lot more willingness to be flexible than before this all started. It’s worth a conversation or, in fact, a few.
- Start telling your story.
If there is one good thing about coming out of this pandemic, it is that consumers are focusing more on local businesses and are ready to go out of their way to support them. You have to be in front of them and stay there, always telling clients how and why you add value to their lives. Local businesses often provide a product or service that cannot be commoditized, which means the wholesalers cannot do it cost-effectively or in a way that delivers the same quality. That’s a beautiful story. Say it.
- If you haven’t already, go digital.
Plenty of data shows that consumers have digitized their purchases, which seems at odds with their support for local businesses. It isn’t, but it does mean you have to put your contractor hat back on and leave it. Customers will buy if you can make it safe and easy. Keep re-evaluating your distribution channels and try to make them digital and contactless in every way possible. Of course, shopping for the experience will return. But, if you want to see a resurgence as well as gain market share, start rethinking the way you deliver your products and services. The digital tools for doing this have improved dramatically, are also cheaper and easier to use – for you and your customers.
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