Managing Through This Mess – Part 2 of 5 – Cash Is King – How Long Is Your Runway?

Managing Through This Mess – Part 2 of 5 – Cash Is King – How Long Is Your Runway?

Cash is indeed King and the Oxygen for your business.

For normal business this number is important, but in these challenging times it is essential. You need to get with your in-house Accountant/Finance Manager and go work the numbers.

What’s your bank balance today?

What is your burn rate (how much money do you spend each day/week/month)?

      • Get that burn rate under control
      • How long is your runway?

What are you owed? i.e. your Debtors

How much do you owe? i.e. Creditors

Actions to immediately take:

    • Talk with all your customers who owe you money. They are likely to be experiencing the same cash flow challenges as you are, but from listening to our marketplace, the vibe is that for the most part people are engaging and working out payment plans.
    • Talk with your Suppliers. The considered view is that we have to ride this out for 3 months or so. Again, the feedback we are hearing is that Suppliers are being reasonable. They too want to get paid but also they, like you want to sell their product.
    • Watch the cash balance at a minimum weekly, but probably daily to start with.
    • Task your finance person/team with keeping a firm grasp on cash collections and bank balance. Have a daily check-in with them to make sure the process is working

All this stuff seems really basic and straight forward, but is now more than ever, essential.

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