The hope of any business owner is that the company is a success, and that the amount of challenges and hurdles it faces is kept to a minimum and they are easy to overcome. While that’s a great hope to have, it’s not very realistic. If 2020 has taught business owners anything this year, it’s to expect the unexpected and to learn how to adapt to the current marketplace.
One of the most common issues that a business will face, no matter the size of the company, is a slow period. This slow period could last a few weeks to a few months and be intermitment or even seasonal in some cases. And while it’s normal, and frankly expected for many businesses to have that slow period, it doesn’t make the lack of cash flow any easier.
Rather than let the stress of the cash flow situation get to you, here are some effective tips that will help you to manage cash flow when business is slow. The faster you can react, the less of an impact that situation will have on the business.
Table of Contents
Make Sure You Are Tracking Your Cash Flow
The first tip is to make sure you have a good handle on what your current cash flow situation is. This requires close monitoring and tracking of all the money coming in, and all the money going out. If you don’t have an accounts payable/receivable software system in place now is the time to embrace this practice. Software makes the task easier, faster, more accurate, it can be automated, and even generate data and charts to help you track trends.
If there are any outstanding invoices from customers that are past due, now is the time to follow those leads and get the cash.
Look for Expenses that Can Be Cut
Now that you’ve got a firm handle on what’s coming in and going out in terms of finances, it’s time to look for any places that you can cut expenses. That could mean downsizing your workforce, cutting back on the amount of inventory you keep on hand, automating processes to make them more streamlined, and so forth.
Look Into a Business Loan
Another option if you’re in need of cash, and don’t see business going back to booming levels fast enough, is to look into a business loan. This can act as that bridge over the gap between the slow period and the more normalized busier period. Even if you have bad credit, there are still companies and lenders who will work with you and offer you a loan based on your business’s finances. A credit score isn’t the only deciding factor that lenders use, so don’t write off the possibility of a loan too quickly.
Renegotiate Deals with Vendors and Suppliers
For any of your regular vendors and suppliers that you have deals with, this could also be a good opportunity to re-examine those existing contracts and look to renegotiate the terms. If the contracts are coming up due and the vendor/supplier isn’t willing to budge on pricing, it may be time to look around and get some comparison quotes from competitors.
Can Your Services be Expanded?
Obviously, the best plan is to increase sales so ask yourself if there is a way to expand your services or product line in order to boost interest. Even offering off-season deals and promotions can catch the attention of customers.
Start Getting Creative
While it can be easy to get trapped in the stress of a slow period, it’s important to take a step back and look for ways you can change the situation and better the company’s financial position.
