In challenging times, it’s important to chart a course for coming out the other side. Data-driven strategies and detailed planning can both be a crucial part of steering your business through the storm. That means, the best time to evaluate and plan is now, before the storm begins. This way, you’re prepared to make informed decisions during a crunch, instead of choices made in panic.
Understand your Cash
As with any emergency plan, the primary focus should revolve around discerning what truly matters. Naturally, your family’s well-being and your health take precedence above all else. Following closely are the welfare of your team and the sustainability of your business. Cash flow is the lifeblood supporting your family and team, making it important to save and protect.
Our recommendation for business owners is to start with understanding your cash position. What is your current cash reserve or access to liquid assets? Inventory doesn’t count here. This is readily available funds in accounts or lines of credit.
This fundamental figure serves as a compass, indicating the amount of time for which your business can sustain its expenses under normal circumstances. If this buffer is minimal or nonexistent, more serious measures such as letting go of employees are necessary.
90-Day Cash Flow Strategy
Subsequently, serious planning for the next 90 days becomes imperative. Do this by using a concise 13-week cash flow projection. This includes forecasting for both income and expenses and comparing the two. Look into strategies that will supplement revenue streams and identify areas where expenses might be cut. The overarching objective remains the preservation of cash reserves for as long as feasible.
Navigating the Storm
Planning for a crisis can leave you with lots of questions. Luckily, we have a comprehensive guide on managing financial uncertainty to lead the way. This resource outlines eight essential steps to gain a firm grasp on your financial landscape. You’ll also find insights into strategic planning and debt management.
Using all these tools, you strengthen your business in preparation for crisis or other challenges that might come your way. While hard times may be daunting, they also present opportunities for resilience and growth. Through evaluation, planning, and proactive measures, you can emerge from challenges stronger and better equipped for what lies ahead.
If you’re ready to make your plan and want an expert to help along the way, bookskeep’s SmartCFO Advisors can help! Reach out to the team today!
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