Cash Flow, Finance

Good relationships with lenders and investors are crucial whether your business is struggling or flourishing. These stakeholders are often lifelines for your company and they can mean the difference between growth and decline.

The relationships you have built with your lenders and investors will always be looked toward in order to assess potential further interactions, loans, and investments.

When your company is on the up, these parties will reap the benefits and will be happy to continue investing in your business. 

But, as with most things, communication is key.

Keeping your lenders and investors up to date no matter the state of business shows proactive leadership and respect. If you only communicate when you need something, it can reflect negatively on your business and they may decide to pull out their investment.

Another thing that can really impact this relationship is establishing something mutually beneficial.

Lenders and investors have their own desired outcomes and being able to recognize and contribute towards these outcomes while still holding true to your own is crucial.

Securing capital is just one step. You also need to make sure you secure a consistent relationship with the very parties who provide you with the help you need when you need it.


Business, Cash Flow, Thrive30

🚀Don’t just survive, but thrive. 🚀

Most entrepreneurs understand how vital cash flow is to the smooth running of their business.

Many still face cash flow challenges; some can be expected, yet others such as COVID-19 pandemic cannot be foreseen.

This CEO reached out to me a few weeks ago.

Her business had been successful for many years but as the pandemic hit, customers began delaying payment of invoices and the deal pipeline started drying up.

With only a few months of cash runway, she was in a difficult spot.

But there are always opportunities in challenges.

My advice to her was to respond quickly and decisively as follows:

➡ Tap into government incentives to ease up the immediate cash crunch;
➡ Build cash flow scenarios identifying variables that affected revenues and costs;
➡ Renegotiate payment terms with customers and suppliers;
➡ Re-imagine the business model to identify new revenue opportunities; and
➡ Perform a line-by-line review of costs to optimize based on the new business model.

Businesses that navigate disruptions better not only survive but thrive during and after adversity.

What changes have you made to your business during the pandemic?

Check out our Thrive30 program to help you navigate these challenging times.

Cash Flow, Finance, Thrive30
“I need to make quick decisions but can’t seem to get straight answers and insights from my Controller.”

Commented a very frustrated COO of a food industry supplier recently.

COVID-19 significantly disrupted their business.

He turned to his Controller for information to make decisions and was very disappointed!

The Finance team was unable to provide accurate, even credible, cash flow analyses and forecasts.

When the COO finally prepared it himself, they discovered that their runway before running out of cash was very short.

Instead of being able to calmly and logically review options and make informed decisions, they had to go straight into panic crisis management mode.

Unfortunately, this is a common occurrence.

Finance teams get mired with compliance work and are not geared to provide timely insights to help management make strategic and tactical decisions.

The pandemic identified a serious gap in the Finance team for this food industry supplier.

How timely and credible insights do you get from your Finance team?

Let me know in the comments.

Business, Cash Flow, COVID-19, Finance
🤔Let people go during COVID-19? Or NOT?

Business leaders have lately grappled with this question a lot; many still are.

Their hearts and minds are conflicted.

They care about their staff and don’t want to let them go..

But, if they don’t, the business may not survive.

Here’s are five steps I suggest:
  1. Take advantage of as many government incentives as possible to improve cash flow and reduce business impact;
  2. Review core assumptions of your business strategy. Is it viable during and post-COVID-19?
  3. Pivot if necessary, and do so quickly;
  4. Identify staff that do not align with the business moving forward;
  5. Say goodbye to staff to a level that sustains business and not for the sake of just making more money.

If you’re a leader in a business impacted by COVID-19, what would you do?


Cash Flow, COVID-19, Thrive30

Businesses that navigate disruptions better often succeed and come out much stronger because they focus on their core purpose with evolving customers needs in mind. Here are seven steps that businesses of all kinds can take during the COVID-19 pandemic, particularly as customers’ changing preferences are not likely to go back to pre-outbreak norms. These are only guidelines and by no means exhaustive or detailed enough to substitute for a thorough analysis of a company’s particular situation.

1. Protect employees

The COVID-19 crisis has been emotionally challenging, changing day-to-day life in unprecedented ways for individuals and businesses alike.

Many jurisdictions have mandated working from home to reduce the spread of COVID-19. Technologies such as Zoom, Slack, Microsoft Teams enables employees to work remotely. Where the nature of work necessitates working at a business location, make changes to your processes to ensure physical distancing guidelines.

Set up processes for employees to express if they are feeling unsafe at work for any reason, as well as monitoring adherence to updated policies.

2. Demonstrate purpose with social responsibility

In times like these, go back to the business’ core purpose and figure out how to serve existing customers and develop new offerings while supporting community response efforts. In doing so, consider whether your business needs a tweak or a complete pivot.

For example, many apparel companies are shifting production to create medical masks and clothing; others such as engineering and devices are transforming to produce ventilators and other medical devices.

Customers will remember businesses that provide solutions to their problems during times of social change. Social responsibility, therefore, ought to be part of the purpose and in times like these consider turning up the social purpose over just profit.

3. Reimagine the business model

Digital revolution has already been disrupting business models, but COVID-19 is fast tracking it.

While consumer demand is down, it has not disappeared. People have dramatically shifted toward online shopping for all types of goods, including food and groceries. Businesses should invest in online distribution and reconceive their supply chains accordingly.

For service providers, moving to a remote service delivery model using technology provides a unique opportunity to expand their geographical reach as more and more customers will be willing to access talent and expertise through remote service providers.

4. Utilize government economic incentives

The Canadian government has put in place several measures to assist businesses weather the economic impact of COVID-19. These measures are primarily designed to help with cash flow and liquidity crunch. For details on such measures and how to apply, please refer to Canada government website.


5. Optimize costs; use zero-based budgeting

Have a line-by-line review of all costs. The focus must be on which cost items are essential for business continuation during the short-term while establishing a structure to anticipated demands of the future once the pandemic is over. Such a cost structure review is best practice during normal times, but a crisis like COVID-19 brings further clarity and sense of urgency.

Make zero-based budgeting process part of your business’ DNA to be better prepared the next time a crisis like this comes along so it doesn’t jeopardize survival and profitability om short- and long-term.

6. Stress test for liquidity

Businesses need to define scenarios tailored to their specific situations, identifying variables that affect revenues and costs. Businesses should model their financials (particularly cash flows) in each scenario and identify triggers that might significantly impair liquidity. For each such trigger, define moves to stabilize the organization in each scenario.

7. Build a collaborative eco-system

Your customers and suppliers also have people and businesses at risk. COVID-19 brings about an opportunity to work with them in renegotiating contracts and service levels to ensure mutual survival. Such a collaborative approach will garner respect and build an eco-system of supportive businesses for the long term.