In these crazy times, one of the most important tactics to protecting your business is managing your cash flow in today’s episode we’re going to talk about just that. Managing cash flow in these challenging times, this is one of the keys to making sure that you’re going to survive and thrive and come out of this better than you went in.
Now, there’s been a lot of things coming out and hopefully as a business owner, you’ve heard about them, you’ve taken advantage of them. We’ve had the PPP, the EIDL loans. There’s been a number of different other kinds of grants and loans that are available and hopefully you’ve taken advantage of everything that you can if you’ve needed too. However, the PPP for most of us is starting to run out and if you are in any of the hospitality type industries, it’s been a long time. We have really not had any full opportunity to be in business and to be making money. So managing cash flow is absolutely critical. If you’re not in those kinds of industries, then you may have had a slowdown in your income, or you may have been able to manage same kind of income, or you may have even grown. But the key is making sure that you’re managing your cash flow. And what do I mean by that? I mean, by making sure that you understand exactly how much cash is coming in, how much cash is going to be coming in in the future, what your expenses are and managing all of that, to ensure that you have the most opportunity to make it through, because it’s very uncertain right now and a lot of people are sitting on their cash.
There’s not a lot of people out spending in places where they wouldn’t normally spend. So there isn’t a lot of excess spending going on because people are sitting on their cash because they’re so uncertain and you may be in that position right now as well, but we have to understand what it’s going to take to keep our business running and right now, every business should be marketing. You need to be out there making sure that people know who you are, what you offer, even if you’re not able to do that right now, even if you’re not able to produce, or provide your services right now, you need to be out there marketing, making sure that people don’t forget who you are that you can, when you can perform your business again, or when people start buying again, depending on what situation you’re in, that you’re top of mind, or if you’re in an industry where they haven’t stopped buying, just staying on top of it, staying on top of bringing in new clients, staying on top of making yourself top of mind with your clients is key.
Because trust me, there are plenty of businesses out there vying for any business that you or vying for the same business that you want to get and it’s the businesses that are watching their cash flow. So they understand what they have and how they can use it, that are going to be able to take their business to that next level and come out of this thriving being much better off than they were before and I understand, I’m a business owner. I understand this whole world of that this has gone on a lot longer than many of us thought, and there is no end in sight at this moment. All right. You know, we got some great stuff to be able to move things forward.
We have no idea if more is coming there is conversations about it, but you know, I don’t hold a lot of weight for that. I think that as business owners, we need to be sure that we’re taking care of ourselves. Now, how do we do that? What are the actual nuts and bolts? How do we do that? Well, we like to use a cash flow projection spreadsheet, and that cash flow projection spreadsheet keeps track of what cash we believe is coming in and what cash is going out and we can then monitor and look at how long before we are in trouble. If you were sitting on a lot of cash and you have cash going out, it can be telling you, okay, it’s by this point, you need to be bringing in money and if you take into account how long it takes for you to bring on a client, what’s your sales cycle? My sales cycle is about two weeks. So I know that if I’m starting to run out of cash, I need two weeks to bring in additional cash to make that work.
When you need to bring in the money and you know how long your cash sales cycle is, and how much time you need to bring that money in, then you can plan for when do you have to be out there marketing. But as I said, you should never stop marketing. One of the hardest things to do for a business is to stop marketing and then start it back up again.
A lot of people think marketing is some expense I’ve got to put to the back burner right now. I would actually disagree with that. Especially if you have marketing that you know can produce results, right? If you have marketing that you know can produce results, you should be putting more money into that right now. So that you can be bringing more cash in. If you know you can’t be bringing cash in, then you should still be investing some money in marketing, staying connected to your customers so that they don’t leave and go somewhere else. So these are the keys.
You want to make sure that you’re on top of your money, that you’re on top of your cash flow and that you’re out there marketing as much as you possibly can right now to stay in front of your people, so that you can survive this.
I would love to have a conversation with you if you’d like to understand more about what I’ve just said, or if you’re interested in some pointers on how to be successful, you can go to secretstosuccessinbusiness.com that’s secretstosuccessinbusiness.com and download our Insider’s Guide to Success in Business.
I look forward to seeing you next week on another episode of businessSUCCESS with Doug Barra.