Do you urgently need to get your cashflow under control? Need some ideas? Here are 7 ways to ease your cashflow during a crisis…
1. Don’t buy any stock.
Keep cash in the bank as much as possible. If you’re still trading and you’re dependent on buying stock in order to be able to trade then obviously this one isn’t for you. However, if you run a salon for example, you may find your suppliers start getting in touch to offer you stock at discount prices. That’s fine if you’ve loads of money in the bank. It could be a good idea to buy stock that isn’t going to go off. If your cashflow is compromised though, if you’re struggling for cash, it’s the last thing you need. Just hold onto the cash.
2. Corporation tax bill? Ask for time to pay.
If you have a corporation tax bill coming up at the end of the month, ask for time to pay. If your money is earmarked for important expenses like paying your staff, phone the HMRC and ask for time. Only contact the HMRC if your tax bill is imminent. If your tax bill is due in a few months time, wait till nearer the time to contact the HMRC.
3. Chase your debts.
If you’ve got customers who owe you money for work you’ve done, don’t be shy about asking them to pay. You’ve done the work and the money is due. It’s simple. If appropriate, you could think about creating payment plans for your small business customers.
4. Reduce your personal and business outgoings.
Ask for a mortgage holiday for three months. Most of the mortgage companies are doing this. We all will be spending less anyway over the next few months because there’s nothing to do and nowhere to go. Unless you’ve taken up an expensive habit over the last few weeks, you’ll be spending less money. Look at how you can cut this down even further. If you have a personal loan or a credit card, ask them if under the circumstances they can freeze the interest on that and also give you a payment holiday. Do anything you can to keep money in the bank.
5. Know your breakeven figure.
Your breakeven figure is how much money you need in each month to pay the bills. You need to have a good idea of how much this is. If you use something like Quickbooks or Zero or some other form of online bookkeeping software, this is as easy as pulling out a monthly profit and loss to see what your costs are. If there are one off costs that you don’t expect again, don’t include them in this.
6. Do some cashflow projections.
Cashflow projections are different from your breakeven figure. They include all your cash in and all your cash out. So for example, if you do get a bank loan that would be money in on your cashflow. It wouldn’t show up in your profit and loss but it would show up in your cashflow projections. It’s money that has come into the business.
7. What can you sell?
If you are furloughed, nothing… However if you have an online presence and a system on your website or ecommerce shop which already exists you can sell vouchers. For more details on why you can check out our recordings on How to manage your cashflow in a crisis FREE on the Business Hub for the next 6 months.
Access is FREE to How to manage your cashflow in a crisis Business Hub for the next 6 months register at https://www.businessmentoring.online/offers/PigDcZyp