returning to the office

Returning to the office won’t be easy. How can leaders support employees?

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As employees begin returning to the office, there are some key considerations that leaders will want to address so their employees are supported.

returning to the office

Going back to the office and back to “normal” is a hot topic around the virtual water cooler these days. But as company leaders finalize their re-entry plans after more than 18 months of remote work, they face a cold new reality: The workplace as we knew it is no more. 

Even though socially distanced employees miss engaging with co-workers in person, many are reluctant to return full time. Research from Leger found that 33% of Americans and 40% of Canadians want to work a hybrid model, meaning a mix of in-office and at-home work. In addition, about half of Americans (47%) and Canadians (50%) who want to return to their workplace wouldn’t be comfortable doing so if some of their colleagues aren’t vaccinated. 

To help ensure successful re-entry, here are several ways to support your employees and teams when getting back to the office: 

Physical health and safety is job number one

Even as public health measures surrounding the pandemic lift, you can take steps to reduce health risks (and any associated fear factor) in your workplace. Guidelines to help stop the spread of the virus include implementing a rapid testing and screening program, providing personal protective equipment, and working with a building operator or HVAC specialist to improve air exchange rates or filtration. In the McKinsey study, improved air filtration was a top request among employees, with 62% saying it could decrease the stress they experienced from returning to work.

Put yourself in employees’ shoes

Just as employees had to acclimate to a new way of working when the pandemic first hit, the return to office comes with its own set of adjustments and challenges. For example, in a recent McKinsey survey, one-third of respondents said the return to work has had a negative impact on their mental health. Among those who have not yet returned to their workplace, nearly half anticipate negative mental health impacts such as stress and anxiety.

Create policies

A vaccine policy might also help ease employees’ minds. A survey by EY found that 61% of employees want their company to require the vaccine before returning to physical workspaces. For employees’ part, encourage them to stay home when they’re sick, practice hand hygiene, clean and disinfect their workstations, and maintain physical distance from co-workers.

Create an environment of psychological safety

In addition to making sure your employees are physically safe, it’s important to prioritize psychological safety. Psychological safety refers to the feeling of being one’s whole self at work, and the belief that one can speak up with ideas, questions or concerns without fear of negative consequences. 

A Workhuman survey of U.S. workers found that only 26% felt psychologically safe during the pandemic and experienced higher levels of burnout, stress and loneliness. 

Some ways you can boost employees’ psychological safety are showing appreciation for their ideas, being an active listener, fostering a culture of openness, and creating a sense of belonging.

Consider pay transparency

Most employers don’t want their employees to compare paycheques, as it can result in animosity and resentment among their teams. However, the concept of pay transparency is gaining momentum, as it aims to close unfair pay gaps based on gender, race, age or disability. While this might not be for everyone, it could be something to consider for some organizations.

Pay transparency allows your company’s compensation figures (salary ranges or specific numbers) to be visible to other people, either internally, publicly, or both. 

While pay transparency encourages equal pay, there’s more to it than monetary benefits. When done correctly, pay transparency can improve workplace culture, promote diversity, boost morale and improve employee engagement. Some pay transparency tips are: 

  1. Review compensation models and resolve salary discrepancies
  2. Determine your company’s comfort level with pay transparency
  3. Train managers on how to successfully navigate salary discussions.

 

Once you’ve reviewed these considerations, you will want to create a clear and transparent return to the office plan. Sharing your plans with employees will help to reduce anxiety and uncertainty about what awaits everyone as they transition into the post-pandemic workplace — whether they return in-person full time or take a hybrid approach.

Up next: 7 ways to make strong business relationships that last

business cash advance vs. invoice factoring

Tired of business cash advances and waiting 90 days for payment?

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Thinking of getting another business cash advance? Learn why invoice factoring might be better for you or your client.

business cash advance vs. invoice factoring

Cash flow is vital for your business and impacts everything from payroll and lease payments to your next capital investment. But when it’s all tied up with your clients and their unpaid invoices, what can you do? 

Many business owners turn to their bank for help, but can’t always get financing. Others may resort to merchant cash advances, but those temporary solutions could leave you in a worse position than when you started.

And what if your business is new and you don’t have the past business or credit history to even apply for the advance? You’re still stuck with outstanding invoices and no cash flow.

 

Related: Learn why you should choose invoice factoring over a cash advance

Unlock cash today with invoice factoring

Why not leverage your current client open invoices to get you access to cash through invoice factoring instead? After all, you’ve worked hard to earn that business, but unless the client is going to pay you early, you can only access it today through invoice factoring. 

Invoice factoring can immediately unlock money that’s already yours, freeing your business from the regular net 30, 60 or 90-day payment cycle. You can use the money for payroll, operational costs, debt repayment, supplier invoices or anything else you want to pay off. 

Your factoring partner keeps a small percentage of the invoice as a reserve, while you see the majority of that working capital right away.

cash advance

Image via Lucas

If you’re in need of ongoing cash flow and want to eliminate the hassle of unpaid invoices, please get in touch. We can explain how invoice factoring works and uncover financing for your business that will unlock the money your business is already owed. 

Free up your business cash flow today and breathe a little easier. 

Get started with a helpful, no-obligation consultation. Find your nearest Liquid Capital Principal today.

Business growth recovery concept

Making cash available for your business recovery

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Part 3 of the “Cash Flow Through Uncertainty Series”: Implement these tips to build your business recovery strategy.

Business recovery and growth concept

When an economic crisis (or global pandemic) comes to an end, it’s time to start thinking about moving from survival mode to thriving mode. But having the cash to get back into growth and prosperity can be tricky after months or even years of crisis income. 

Using these tips and resources can help you to recover better, faster and stronger:

1. Know your working capital

Basic math can give you an idea of how much cash you have to work with. Subtract your liabilities from your assets as a starting point. To get more detailed, set a cash flow budget. Some businesses will be starting almost from scratch, so you need to create a realistic budget of how much you’ll need to get back up and running at full speed.

2. Make realistic budget forecasts

Revenue may not immediately reach pre-crisis levels. So plan for lower-income levels in the meantime (ie. at least for the next six months) until you can more accurately gauge demand. Similarly, you may have to increase spending to reach the inventory and staffing levels you’ll need for a successful recovery.

3. Take a look at the ‘damage’

Assess exactly where you are financially now that you’re on the other side of the crisis. Work out how badly you’ve been hit, including your assets, investments, savings and regular income. Compare those with last year’s figures and build an accurate picture of where you’re at, where you want to be, and what financing and income you need to get there.

cash flow budget

4. Create a realistic schedule for recovery

When things start getting back to normal, you’ll be understandably impatient to return to pre-crisis levels of business. Creating a step-by-step schedule for achieving this is crucial for successful cash flow management. For example, you might first secure the financing you need for recovery, then build up your inventory and finally hire new employees (or bring back old ones).

5. Find a supportive and understanding finance partner

You may need flexible finance options to make a full recovery—and you want a lender whose employees have the right mix of expertise and understanding of the needs of small and medium businesses. Many larger financial institutions are risk-averse and don’t offer flexible options. On the other hand, alternative lenders can offer a variety of financing solutions, plus the expert advice to help your company launch into recovery.

Help for every uncertain stage

Liquid Capital is committed to helping small and medium-sized businesses to weather uncertain times and periods of crisis. Our team of experts are experienced in strategic funding strategies and will be with you every step of the way as you go through turbulent times.

Along with that expertise, we provide the finance options that can offer working capital when you need it, including invoice factoring, asset-based lending and more. Get in touch to find out more about our cash flow solutions and how we can help your business.

 

Up Next: Read Part 1: How to manage cash flow through uncertainty and Part 2: Sail through a cash flow crisis — 5 places to batten down the hatches

4 tips to turn customers into advocates

4 tips to turn customers into advocates

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Part 3 of the “Business Relationships Series”: Why entrepreneurs should focus on ways to turn customers into advocates.

4 tips to turn customers into advocates

It’s no longer enough to connect with a prospect just at the time they’re ready to make a purchase. Modern customers are now trained to do their research before making a purchase. And technology has made it easy for them to discover your happy customers (or not), and those customer reviews will play a large role in persuading prospects to buy from you.  

One recent survey found that 90% of consumers said that positive reviews influenced their buying decision. Another survey discovered that 86% of customers are willing to pay more for a great customer experience while, conversely, 32% of customers will turn their back on a company they love, after just one bad experience.

Turning customers into advocates

After turning a prospect into a customer, and creating a good business relationship, the next step is to strengthen that relationship and turn your customers into advocates of your brand.

Brand advocates are passionate champions of their favourite organizations—and will tell others about their amazing experience with your company. In fact, according to a recent study, advocates are two to three times more effective at attracting new customers to your brand.

Ready to build an army of brand advocates? These strategies will help you and your clients get even more out of your relationship:

1. Never take customers for granted

Ensure that your product or service never slips from the excellent levels your customers have come to expect—and be diligent in maintaining an outstanding customer experience. Maintain consistent communication, spend time with your customers and learn as much about them as possible.

This might be over the long-term or even just in a quick phone call. Use that knowledge to be selflessly helpful by providing ongoing, valuable advice and ensuring that your relationship is mutually beneficial.

2. Under-promise and over-deliver

Always strive to deliver exactly what was promised, on time, and then some. You can also provide added value to your customers in ways that have little monetary cost to you but considerable value to them.

For example, do a quick follow-up to continue nurturing the customer relationship after they make their purchase. Something as simple as a check-in email to see how they’re enjoying your product or providing them with a helpful piece of content after their purchase can go a long way in leaving a lasting impression. You can also wish them a happy birthday if you have that information, or even reach out to B2B clients and congratulate them on a new product launch or business achievement.

3. Be there for them in tough times

When clients are going through a difficult period, do what you can to help them get through it. For example, you may choose to accept late payments or defer late-payment charges for those who are experiencing a rough patch. You could even suggest a payment plan for clients who are having cash flow issues.

Depending on your relationship with your client, you may also consider referring them to contacts who might be able to help them out, such as with alternative financing options or inventory liquidation.

4. Create a customer advocacy team

Dedicate a team, or internal staff, to managing a customer advocacy program. Having a specific person or group responsible for nurturing customers into advocates will formalize the process and ensure that it’s a key strategy in your customer growth plan.

In addition, consider establishing a loyalty or referral program, which can encourage customers to become advocates. Then, task your customer advocacy team with managing its growth, and the positive spin-offs will naturally evolve throughout your entire organization.

 

If you’re looking to grow and expand your business into the future, making strong business relationships is the cornerstone to success. Here at Liquid Capital, we’re business owners, too, so we understand what our clients go through. While we’re dedicated to helping out clients with their financing needs, we also get to know them as people so we can understand their business challenges and opportunities—and then work out a plan to be the most useful partners for them.

Ready to learn more about our versatile, unique range of financing solutions, such as invoice factoring, that suit many sizes and types of businesses? Contact your local Principal today.

Effective communication skills

How leaders can navigate these market recovery trends

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Liquid Capital’s Fall Roundup: As the economy begins to stabilize, how can you successfully navigate the market recovery?

market recovery trends

This year, there has been a substantial shift in the ways that customers and employees engage with companies. For many entrepreneurs and business owners, much time will be spent navigating current market recovery trends.

From finding enough time and mental stamina every day, to make impactful decisions and changes for your business, to motivating yourself and those who work for you — only the strongest will successfully emerge from the upcoming COVID-recovery period.

Manage your time more effectively as you navigate the COVID-recovery period

time management market recovery trends

Recovering from the ripple effects that the pandemic had on businesses will take serious time and energy — something that most entrepreneurs were running short on before COVID struck. Leaders who want to ensure that they’re able to take their companies into the next year (and years to follow) must be able to allocate the right amount of time to the right tasks. The company, its employees and its customers depend on it. These five tips can help you get started mastering the skill of time management.

Read more

 

Keep employees motivated if they’re still working from home

Keep employees motivated

After almost two years of remote work, workers are struggling with mental health, productivity and overall success now more than ever. And while many employees are making the transition back to the office, many more are continuing to work from home. Is your office space still in transition to fully on-site or are you and your employees continuing to work from home? And what can one author’s experience being homeschooled teach us about shifting how we work remotely? Find out below!

Read More

 

Better mental health leads to better decision-making during times of uncertainty

Better mental health

Our brains were not made to constantly shift in response to the new demands of a quickly changing world. And since the pandemic hit, many leaders have been pivoting on a dime and being agile in order to stay competitive. Accepting that our brains were physically not designed for this kind of stress is the first step to becoming stronger. The next step is embracing the following top strategies.

Read more

 

 

Effective communication skills: The leadership key to 2022

Effective communication skills

From active listening to asking effective questions to getting comfortable being uncomfortable, if you want to lead a team with ease your communication skills must be on point. Here are nine of the best ways that you can start improving the quality of your communication and, in turn, lead your team better.

Read more

 

Up next: Build stronger, longer-lasting relationships.

strong business relationships

4 tips for maintaining strong business relationships

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Part 2 of the “Business Relationships Series”: The importance of maintaining strong business relationships with your contacts and clients.

strong business relationships

The way businesses attract customers has shifted forever. The old methods of marketing to catch a customer’s attention, getting them interested and having them make a purchase doesn’t happen in the same way anymore.

In Part 1 of the “Business Relationships Series” we looked at some key tips for turning prospects into customers. In this part 2 of our series, we’ll look at what to do now that you’ve landed a new customer—and ways to help you keep them as a customer.

Strong business relationships are like a good friend

Imagine for a moment this scenario in your personal life… 

You’ve made a new friend and have a great connection—but then as soon as you hang out, maybe going for a round of golf or dinner at the newest restaurant in town, you stop calling and seeing them. Chances are, they probably wouldn’t be willing to help you when you call needing a ride to the airport or an extra hand when you move.

It’s a similar situation in business. One of the biggest mistakes a company can make is to neglect their current customer base. Doing so inevitably results in high churn and loss of customers—which can have a serious impact on your cash flow. Not only is it more expensive to bring in new clients to replace those you’ve lost, but you’re also missing an important opportunity to increase your sales. 

You need to keep working to make sure your current customers (and referral sources, suppliers and other business contacts) are happy in your relationship. If you have a high churn rate, then it may be time to look at ways to strengthen your customer and contact base.

Here are four tips to get you started:

1. Offer an excellent product or service, with a best-in-class customer experience

Having a great offering is clearly a big advantage for both securing and keeping customers. However, the way you treat your customers is just as important as what you deliver to them. Ensuring that everyone in your company buys into the notion of providing an outstanding customer experience, and delivering the training and support to ensure they succeed, will set you apart from most of your competitors.  

Not only will this strategy ensure that your customers stick with you, but it will also turn them into your biggest fans who will deliver quality referrals and help you to grow your business.

2. Put your customers first

Having a customer-first business strategy can really pay off and set you apart from your competitors. Listen to your customers, take their feedback into consideration and keep your brand promises. This could mean that you may need to invest extra working capital into your business, which can be a daunting thought if you’re already struggling to stay cash flow positive.

If you do find yourself in need of additional capital, consider leveraging an alternative funding solution, such as invoice factoring. Remember, investing in your customers may come with short-term costs, but the goodwill, trust and gratitude you will earn will bring dividends in the long term.

3. Be honest and authentic

Nothing will kill off a business relationship faster than little white lies or coming across as untrustworthy. Clients will smell it from a mile away and run for the hills. If there is a problem, own up to it, explain how it happened and, most importantly, describe in detail how you will put it right.

4. Help your customers become successful

Be a partner, not just a supplier. Use your experience and expertise to provide advice that will support them in growing their business. Help them to overcome problems, suggest new potential markets or introduce them to a valuable supplier or potential customer.

 

Just as with any personal relationship, most people want to work with others who provide genuine support and a mutually beneficial experience. Companies can nurture and strengthen their current customer base by providing valuable advice, ideas, contacts and encouragement. By being a trusted partner and resource, your customers will stick with you—and bring you referrals.

At Liquid Capital, we understand the importance of relationships and work to help provide you with the working capital you need so you can focus on your customers. Want to learn more about how we can help you and your clients? Contact us today.

Business relationships and meeting new contacts

7 ways to make strong business relationships that last

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Part 1 of the “Business relationships series”: The important steps for making, keeping and strengthening business relationships so your company can thrive. 

Business relationships and meeting new contacts

Turning prospects into customers — and ecstatic customers at that — is the holy grail of small and medium-sized businesses. Building a customer base from scratch is hard, but with the right strategies, you can turn a snowball into an avalanche pretty quickly.

Building strong business relationships — with customers, referral sources and suppliers — is essential for modern businesses to succeed. 

Here are some key tips for converting strangers into loyal customers:

1. Have sales and marketing work in sync 

It’s more important than ever for these two teams to work side-by-side. Not all customers have the same buying journey, so the sales team needs marketing’s support to be efficient and flexible. At the same time, marketing efforts need to be proactive and able to build customer relationships at different speeds. 

2. Don’t drop the sales ball

Business relationships with Sales team

It’s also important that, after all the hard work to make new contacts, create leads and get positive brand equity, that your team doesn’t drop the ball during the sales process. This can happen, even unintentionally, if you aren’t managing your lists to reach out to contacts, start the conversation or follow-up at the right times. 

But more importantly, remind your Sales team that building relationships is key to long-term success. While they may have a short-term quota, it’s critical to get to know the contact. 

3. Set goals around building relationships

The prospect’s experience with your reps needs to be of the highest quality, not only to convert them into customers but also to set up high expectations of what doing business with you will be like. 

Set internal goals around the customer experience and SLAs around response time and quality of follow-ups, so that you can hold your team accountable for building relationships. Encourage team members to meet objectives through gamification, bonuses and regular reviews.

4. Mine useful customer data — and use it effectively

Business relationships and customer data

Invest in software that will enable you to identify and track your potential customers and deliver insights that you can quickly and successfully act upon. This information can be used by the sales team to understand how close each prospect is to becoming a customer, and how best to move them along that journey.

5. Get personal

Make interactions personal, based on what you’ve discovered about the prospect. This customizes their experience, makes your interactions more meaningful and will encourage them to take the next step. 

6. Deliver real value before asking for anything

Provide prospects with something of real value well before they become customers. This could either be a piece of useful and actionable advice, a valuable referral, a customer story that fits your prospect’s situation, or a white paper that addresses one of their main concerns. 

By constantly providing value, you’ll set your company up as trustworthy, an expert in your field and worthy of your prospect’s business. 

7. Check in with prospects frequently

Stay top-of-mind by keeping in touch with prospects regularly. But don’t just send them a generic email. Find out if there are any key issues they’re going through and, as per the previous tip, and deliver something valuable. 

 

At Liquid Capital, we’re business owners, too. We understand what challenges our clients are facing and the importance of evolving their businesses in the new normal. While we’re dedicated to helping our clients out with their financing needs, we also get to know them and understand their business opportunities, so we can work out how to be the most useful partners.

We have a versatile, unique range of financing solutions, such as invoice factoring, that suit many sizes and types of businesses. Get in touch today to find out how we can help and how much working capital we can provide your business. 

 

Images by Paval Danilyuk, George Morina and fauxels.

mental health for entrepreneurs

Positive mental health practices for entrepreneurs

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Part 2 in our series on self-care in business, and how mental health practices for entrepreneurs and business owners can improve your work-life balance, productivity and efficiency.

mental health for entrepreneurs

Being an entrepreneur is not for the faint of heart. While you enjoy the benefits of setting your own goals, hours and definition of success, those benefits come with long days, putting out fires, and a lot of self-reliance. 

Managing the inevitable stress — and even burnout — you may come up against as an entrepreneur, while at the same time working hard to scale your business, manage your staff and deal with whatever life throws at you can be incredibly taxing. And when you are a small or medium-sized business, managing those concerns can be tricky without the programs and policies that are only feasible for larger enterprises. 

Keep reading for accessible ways to engage in self-care to ensure that you stay on top of your game. 

Managing your work-life balance

If you’re feeling the effects of stress on your mental health, you’re not alone. In fact, a 2019 US study by the National Institute of Mental Health found that 72% of entrepreneurs reported mental health concerns. A similar 2019 study by the Canadian Mental Health Association (CMHA) found that 46% of entrepreneurs reported that mental health concerns impacted their ability to work. 

When the CMHA asked entrepreneurs what they needed most to maintain positive mental health, “more than half (57%) reported they needed work-life balance.” The most common coping strategy, however, was “being persistent,” which is not necessarily feasible or effective. 

But this doesn’t mean that a happy work-life balance is beyond reach! When you don’t have access to professional mental health practitioners, employee assistance programs, or the staff to help shoulder some of your workload, there are some simple ways to support your mental health.

1. Schedule breaks like appointments

Many of us feel guilty for taking time away from work when our success rests squarely on our own shoulders. But when you recognize that breaks are actually an investment in yourself, including your ability to make sound decisions and produce your best work, it’s easier to see how crucial they are to your performance. 

Instead of squeezing in time for a quick break whenever you can fit it in, schedule your breaks just like you would any other appointment or meeting. This is helpful whether you are at the office or you are working from home.

For example, one BC-based communications entrepreneur schedules his yoga classes and golf games into his calendar like he would a client meeting. “So, if somebody calls and says, ‘Hey, can we meet?’ I just go, ‘No, I have an appointment then.’ I don’t feel guilty about it anymore the way I used to. This is a necessary component for me to be able to perform at a high level. So, I’ve got to take care of myself first.”

2. Find a release

It’s important to allow ourselves time to recharge so that we can come back to our work with fresh eyes. This means that when you do take a break, even just for 15 or 30 minutes, you need to allow yourself to completely disconnect from your job. 

That could be something physically active like hiking, something creative like painting, or other hobbies and activities you love, such as gardening, spending time with your kids and pets, or even reading a novel.

In fact, a 2012 study from Stanford University found that there is a significant increase in blood flow to the parts of the brain associated with executive functioning when you are closely reading literature.

3. Talk to other entrepreneurs

Entrepreneurs are often isolated – you have to rely on yourself to problem solve and manage your own health. Reaching out to other entrepreneurs, colleagues or friends to simply talk about the issues you’re facing can be hugely helpful in working through those issues. 

When we normalize talking about our mental health, we find not only more avenues to cope, but that we’re not alone in what we’re going through.

4. Revamp your nutrition

Long hours fuelled by coffee and protein bars may sound familiar, but it’s not doing anything to help you be at your best. Harvard researchers found that diets high in vegetables, fruit, unprocessed grains, fish and little red meat or dairy can lead to a 35% decrease in the risk of depression. This is because 95% of our serotonin is produced in our gastrointestinal tract. 

Researchers explain that “your gastrointestinal tract is lined with a hundred million nerve cells, or neurons, it makes sense that the inner workings of your digestive system don’t just help you digest food, but also guide your emotions.” If you don’t have the time to cook, explore the possibilities of food delivery subscriptions that make nutritious meals more convenient.

 

Being an entrepreneur can be both exhilarating and exhausting. By finding mental health practices for entrepreneurs, including simple and inexpensive ways to prioritize yourself, you can better prepare for those moments when you need to be operating at your best. Take your mental health seriously – your business will thank you.

At Liquid Capital, we’re business owners, too, and we understand the many challenges that owners and enterprises face. We work alongside our clients as true partners, and we’re not only ready to help assist with your financial needs, but also in other strategic areas that can help take some weight off your shoulders and keep your business growing.

 

Missed part 1? Learn how to build more self-care into your business and build a sustainable routine.

Cash flow crisis

Sail through a cash flow crisis — 5 places to batten down the hatches

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Part 2 in our “cash flow through uncertainty” series. Missed part one? Read «How to manage cash flow through uncertainty.»

Cash flow crisis

When you’re in the thick of a full-blown crisis and know what you’re up against, what can you do to come out the other side intact? What strategies can you use and what resources can you lean on? 

Here are five places you can focus your attention:

1. Focus on your customers

Your best customers are a great resource in times of crisis. You could offer them hard-to-shift inventory at a discount and give favourable terms for paying invoices early. Now is also a good time to contact old customers: use your CRM software or run a report from your sales software and send them offers that can turn inventory into quick cash.  

2. Be proactive with your receivables process

Make sure your invoices are extremely clear, with a specific due date, purchase order number, details of the goods or services the bill is for and the name of the person who placed the order. Send out a reminder when the due date is close and another when it passes. Pick up the phone and call if you still don’t receive payment. Make it easy for customers to pay: offer e-transfer, credit and debit card and mobile payment options. 

3. Consider invoice factoring

This financing option allows you to sell your invoices to an invoice factoring company such as Liquid Capital for a small fee. You receive money owed much faster, and, because it’s not a loan, there is no interest to pay. This can be a really effective cash flow strategy for businesses during a crisis.

More questions about invoice factoring? Get the answers here:

4. Try and extend your payables

Talk to your key suppliers and try and improve your payment terms. Negotiate longer payment periods or ask for a discount if you pay sooner. 

5. Review your cash flow forecasts constantly

During a crisis, you need to keep on top of your cash. Look over your cash balances daily and reconcile them with a robust accounting software so you constantly know how much cash you’re holding at any given time. Review your forecasts more often than in normal times: at least every three months.

 

If you’re looking for some guidance to improve your cash flow during a crisis, get in touch with us and we’d be happy to chat. We’ll review your current cash flow along with options to improve your business situation so you can take the next step in your strategy with confidence.

Cash flow through uncertainty

How to manage cash flow through uncertainty

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Part 1 in our «cash flow through uncertainty» series.

Cash flow through uncertainty

The COVID-19 pandemic has proven a big test for many small and medium-sized businesses. Being able to manage cash flow during its various stages was key to many companies’ survival, but sadly, those who were not prepared did not survive. 

Crises can take many shapes: from another pandemic to an unexpected industry meltdown or an abrupt change in a business owner’s personal circumstances. 

It pays, therefore, to have tactics and resources ready when faced with times of uncertainty, a crisis or recovery. This forward-thinking planning will give your business a better chance to not only survive the next crisis, but to come out the other side even stronger.  

Managing cash flow in uncertain times

During a prolonged period of uncertainty, small and medium-sized companies can’t afford to carry on business as usual. When you can’t be sure of what’s around the corner, you need to be prepared for what might be up ahead. Having solid cash flow is essential to ensure that you can keep producing your products or service, pay your staff and keep the lights on. 

There are a number of strategies you can use when uncertainty makes it difficult to plan with any accuracy:

1. Set up financing options

It can be a lot easier to put financing in place before you actually need it. One strategy is to arrange for a rolling line of credit in case cash flow becomes tight. The big advantage of a line of credit is that you don’t pay interest until you use it. It’s extremely flexible and allows you to borrow and pay back at any time. You may never need it but setting it up now could help you to survive if things go sideways. It can also help you to have peace of mind, knowing that you have a back-up option if cash becomes tight. 

2. Factor your way ahead

Since many businesses are already extended on their credit or cannot qualify for traditional financing, you may also consider invoice factoring as another way to improve your cash flow in uncertain times. By accessing working capital based on selling your open invoices, you won’t go further into debt and you can gain immediate inflows — and you won’t be paying interest or penalties compared to other types of financing.

3. Hit the growth pause button

Going ahead with aggressive (or even moderate) growth plans during uncertain times can be devastating. Stretching your finances by expanding, taking on more real estate or increasing your employee count may not always be a good idea if the economy is on the verge of a dip. Put those expansion plans on the back burner until you feel that the situation has become steadier and more predictable.

4. Reassess your inventory

Take a good look at your stock and see if there is anything that can go. Inventory that you know can take a long time to sell, or an excess amount of any particular stock could be cleared out quickly to turn it into much-needed cash. You could either offer it to your best clients in a discounted flash sale or sell it to a liquidator. 

5. Take a ruthless look at your costs

Improving your cash flow in uncertain times provides the ideal opportunity to go over your costs in minute detail. Cancel or pause anything that is not absolutely essential to the successful running of your business. Any savings you can make now will help keep your cash flow healthy if things take a turn for the worse. 

Get our Cash Cycle Guide for smart strategies to maintain positive cash flow.

6. Find a trusted alternative finance partner

We would be remiss not to include this tip. You likely have a finance partner at a traditional financial institution, but you should also have alternatives in place if the bank says no. At Liquid Capital, we work alongside you and your banking partner to ensure you get the right mix of financing when you need it.

 

Uncertain times can escalate quickly, especially when a true crisis hits. By getting ahead of the issues, you’ll be prepared to get through a downturn in the market and keep your business prosperous. 

 

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