“If options aren’t a form of compensation, what are they? If compensation isn’t an expense, what is it? And, if expenses shouldn’t go into the calculation of earnings, where in the world should they go? – Warren Buffett
Over the past few months, Covid 19 has swept not only the world by storm but businesses as well. As the result of statewide shutdowns and various industries being told to stay home, many businesses have seen a significant decrease if not a complete stop in their cash flow. As most business professionals know, Accounts Receivables are the life line to any business. Without it employees cannot be paid, office expenses cannot be rendered, and most importantly businesses cannot survive. In today’s blog, I’m going to explore how to combat these trying times so businesses can not only stay afloat but thrive.
Cash Flow – The elephant in the room for most businesses is that they are not operating on enough cash flow to sustain their business during this current period of turmoil. Here is where companies like Thrive Vine Consulting Services can help. Right now is a great time to make the most of your receivables. Have customers already contacted you and expressed financial difficulty or asked for their payment terms to be increased? If so, how can your business handle a delay in payment. In many cases there might not be enough reserves to prevent loss of employees, or even the business. A way to combat the issue of cash flow is through communication, can your customer make any payment? What payment options do you offer your customer? These questions and many more are brought to the forefront as many businesses struggle to adapt to newly found cash flow concerns.
Communication – During this time of uncertainty, strains in business relationships may occur. Across industries many businesses are waiting to be paid before they can pay their vendors etc.. With the stakes so high during this time, how can one keep the relationship AND introduce the concept of compensation. A few tips we have is to evaluate the relationship before Covid-19. As much as we know this terrible pandemic has affected many businesses. There are other businesses who might try to use the circumstances to extend their terms even longer. If you’ve always had a great relationship with a customer, it’s worth negotiation. In the terms of payment plans, payment options, and even barter if that means it keeps your business running. At the end of the day, communication is key and we can use these times to build better rapport with our customers while still achieving success in our own businesses.
Revisiting Processes – Across many industries Covid-19 has simply forced businesses to adapt. Restaurants who have never prepared take-out before are now adapting, businesses who have never offered the option for their employees to work remotely are now doing so. It’s very true that necessity is the mother of invention. There is no better time than now to take a step back and take a look at your business processes and how things can be streamlined. How much time is being sent reaching out to follow up on invoicing? And if there is too much time being spent, is there any way to automate it? Now is the time to recognize those processes where less time can be spent and in turn resources can be re-allocated to income generation in order to leverage up the business.
Conclusion – This is a scary time indeed for many businesses. However by bringing awareness to the proper precautions, we can use this time to strengthen many of our business relationships and even come out of this making our businesses leaner and more efficient. We’d love to hear your thoughts. What are some innovative concepts you have instituted in your business?