Cash Flow is King/Queen!  - The reality 

We are seeing numerous stories of SME’s in all industries coming to terms with the new world order.    Stories of only the strongest will survive, those with the deepest pockets will scupper the small businesses, diversification – free offerings to keep brand awareness ….ultimately, how do you keep a business going with no idea what is coming in…how can you forecast for that scenario!!! 

Impossible right?...…well not quite …...here is how….

Undoubtedly, Cash will be key …..hanging on to it, trying to make some of it, getting some more from loans, beg, borrow …(don’t steal!).  When this whole sad picture started to unfold in its’ totality, I am sure many of us used not only the C(V) word but the F word …Financial disaster!  Like most in things life and business, we shouldn’t react, but take a breath and respond. 

What is the difference?…. Well a reaction in this scenario is to cancel everything down to the milk order, keep suppliers waiting and call in every invoice owed to you with an immediate sanction and to some degree I guess…this is exactly what we all should do, but only to some degree….stories of immediate laying off from many firms, anyone with less than 6 months under their belt…teams of people.  But then there is another way…. a more human way and a more considerate way… Of course there is…

1. Speak to your suppliers – ask for a payment holiday, or a reduction in price for a few months, they don’t want to see you fail as it will affect them too.  Try and look after your suppliers too, they are in the same boat as you, don’t cut them off completely…help each other!
2. WRITE IT DOWN….do a cash flow on your worst case scenario….and your worst case scenario is zero coming in…not a great thought I know, but then if anything does come in it is a bonus. 
3. Write a cash flow for the next quarter, but also look at the last 6 months of the year too, none of us can depict exactly what it will look like of course, however, it could be a mistake to think things will just go back to normal in July on the same trajectory as before.  Plan for the worse and then hope it is an over reaction.  In essence we did a short term cash flow, a medium term cash flow and a cash flow for 2021!!
4. KEEP HOLD OF YOUR CASH….ask for payment holidays on any loans, mortgages, rent and bills keep the money you have, for as long as you can.

•  Go for the business interruption loan with your bank…hey.. you may not need it and that will be great – no fees no interest for 12 months, so take advantage of it.  Another safety net in the medium to long term.

5. Make a contingency plan for the next month then quarter and then do it again, as the situation further evolves. Always, keeping an eye on your bank balance.
6. Communicate the plan and any changes to it with clarity and often.
7. Act with grit and determination – act like you know what you are doing – even if you aren’t sure – Lead your team, we all need direction after all.
8. Speak to other businesses and use your networks, when I did this, it made decisions easier/clearer and you know people are all in the same boat and yes, you can do each other favours and work together for the greater good. 
9. DON’T be a victim of this in your business, it is scary, but certainly not insurmountable.  There are some amazing stories across local, regional and national companies where there has been diversification, just look on facebook at how the catering industry have responded and many local businesses helping out, it is quite inspirational.

The Key ultimately, will be holding onto as much cash as possible.