How can you manage cash flow during low revenue periods?

It has been our experience that when we receive large payments, investments or large distributions from investments … that we always earmark what we call “wet money”. These are funds that are saved for a rainy day, because those days always come. Our fund for this, collects 10% of every penny that comes to Xenesis … and we are ONLY allowed to use these funds, with board approval and to keep the company ALIVE. Yes … we’ve had to access these funds, a lot!!! Thank God we have them.

If you are overwhelmed by the detail of doing a full cashflow, here’s a “Pareto principle” type approach to get you started. 1. Identify the top 3 essential expenses - what are they? How much are they? 2. Identify the top 3 discretionary expenses - what are they? How much are they? 3. Clarify your primary sources of revenue - what are they? How much are they? 4. For the expenses, what is the smallest/easiest change you can make that will deliver the biggest saving? 5. For revenue, what are the smallest/easiest ways to improve your income?

Cash flow is the lifeblood that ensures your business can exist tomorrow. Here is a 5 pt checklist that could you buy time to evaluate / recast longer term strategy & reboot execution. have a budget? No? make one. Have one. track it daily. list top 5 expenses (rentals, employee costs, admin, COGS, marketing, finance costs, Etc) list your revenue by region, customer, product line. 1. Set up measurable targets for increasing collection & reduction in costs. 2. Track collections not just billed sales. 3. Defer all non essential spends, re negotiate (longer) credit terms with suppliers. 4. Communicate transparently to leadership 5. if possible Cut a layer of management; fuse roles, stretch the best people. (Fat does exist).

Embrace digital tools or apps that offer instant insights into the ebb and flow of your finances. Just as you wouldn't wait for an annual physical to gauge your health, don't wait for quarterly reports to assess your cash flow.

Forecasting: Keep a close eye on cash flow trends, and anticipate low periods. Reduce Expenses: Cut non-essential costs, and renegotiate contracts. Increase Inflows: Offer discounts for early payments, invoice promptly, and diversify income streams. Manage Inventory: Minimize stock levels; negotiate longer payment terms with suppliers. Defer Payments: Negotiate extended payment terms with creditors, and delay non-urgent expenses. Set up a cash reserve to cover operational costs during lean times. Seek Financing: Explore loans, credit lines Strengthen customer relationships to encourage repeat business and referrals. Consider temporary staffing or reduced hours to manage payroll expenses.

You need to where can you potentially cut down money. Track your expenses and see which one can be avoided for some time and work on that immediately. Automate processes as much as possible and negotiate to cut down even further.

who needs traditional CFO tactics when you have a startup CFO ready to navigate the financial rollercoaster with a touch of quirkiness? Explore the untapped market of meme licensing –who doesn't want a piece of that viral cat meme? Adopt a 'less is more' approach to office decor. Less furniture, fewer distractions, and voila – an ultra-modern, cost-effective workspace! The more creative, the less tax – incentivizing innovation while balancing the books Launch a blockchain-powered coffee coupon system for the team – a decentralized, caffeine-fueled revolution ensuring everyone stays awake for those late-night brainstorming sessions! Hire expense-tracking ninjas to ensure every penny is accounted for ;:)

This varies from business to business, but headcount tends to be the biggest expense. For tech companies, cloud costs have historically been the second highest (us included), Pump.co brings group buying to cloud spend, companies can pool together and reduce cloud spend by up to 60% and it is a free tool!

Identify areas where cost reduction won't compromise core functions. Focus on targeted cuts—prune the non-essential without jeopardizing productivity.

Leverage AI algorithms to identify cost-saving opportunities. LinkedIn community discussions and AI-driven expense analysis aid in trimming unnecessary expenses without compromising operational efficiency.

Identify untapped opportunities within your existing market or adjacent ones. Introduce complementary products or services that align with your brand.

Utilize AI-powered customer insights to refine sales strategies. Leveraging LinkedIn's professional network data and AI-driven predictive models aids in targeted marketing, nurturing leads, and increasing conversions.

Take a proactive approach to sales. Instead of waiting for customers to come to you, or just trying to drive them to your website - go out and present your business in the places where your customer is already hanging out. This could include partnering with other companies like gyms, art galleries or members clubs and asking if you can promote your products or services to their customers. Or approaching shared office space organisations to offer an activity whilst also getting feedback - such as free lunch in return for feedback on your products - as this is a great way to build relationships and gather data for future sales

In seasonal/tourist off-seasons, don't be afraid to get creative with your product or service offerings. In lean environments like those, every sale matters. Maybe "hot yoga" in the summer becomes "snow-ga" in the Winter. Maybe a logging company decides to sell wreaths during the holidays. Additional offerings can be the tipping point that allows you to keep your staff employed, your bills paid, or even your doors open during the offseason. That being said, NEVER compromise the reputation of your brand for a quick sale. Protect your brand at all costs.

During tough market conditions and high competition, differentiate the product with innovative so to enhance customer satisfaction and improve retention rates helping to manage or increase cash flows.

If cash flow is tight, then stock turn is the key. In many product business's 20%of the stock often achieve 80% of the sales This means 80%of the stock is only achieving 20%of the sales A stock control and replenishment system must be in place, to insure you have your cash tied up in best sellers Cut the 80% stock to ensure you are never out of stock of the best selling 20%

-The most ideal would be to clear the inventory by boosting sales at a discount, -not stack up more, which otherwise you would do.

In this inflationary environment cash flow management is key as you do not want to tie up resources in inventory that has a slow turn. This is where an efficient inventory system is paramount whereby it ties directly into items sold to manage items and costs critical for revenue generation and cash flow management. Businesses would benefit from data analytics to keep them on target

Exceptional insights on managing inventory in a product-based business! Striking the right balance between stock levels and cash flow is crucial. Techniques like just-in-time, economic order quantity, and ABC analysis can be game-changers. Additionally, the suggestion to repurpose excess inventory through discounted sales or charitable donations showcases a thoughtful approach to sustainability and community impact. Wise strategies for a thriving business and a positive social footprint!

Implement AI-based inventory management. Analyze LinkedIn community trends and AI-driven demand forecasting to optimize stock levels, avoiding excess inventory during low revenue periods.

External funding can be such a vital tool in managing cash flow. You can use invoice finance or factoring to get paid for your invoices upfront to avoid payment terms with your suppliers

The answer to the question above REALLY depends on your industry and startup. For instance, if you’re a space-tech startup, you’ll need to raise because making revenue takes a long time. Cost cutting might be a solution but it’s my least preferred as it doesn’t cure the problem.

Seeking external funding becomes necessary to address cash flow gaps. Often the quickest and easiest route is through revenue. Go sell more.

This is a giant topic. Seeking external funding is not begging for more money. The funding process requires planning, understanding the total financial needs of you company long-term. Always ask for the funds, in the right product structure and time periods to make the company successful. Avoid underfunding your company which increases risk levels when economic and financial conditions could change.

If your organization can manage raising equity vs taking out a loan at would be a better option especially in an environment where immediate cash flow is unpredictable. One can always buy back their shares at a later date if so desired but there are lots of creative ways to offer potential investors income opportunities and it also keeps the business focused and innovative as they know they are accountable to share holders

Planning is the best and sure shot way of avoiding reaching the stage where you have to look to cut down people and costs. Make sure you have a financial yearly plan and a contingency fund of 6 months in case things go south for you! Plan ahead and avoid a headache later!

I always put away 6 months' worth of expenses in Fixed Deposits and start looking to raise a round when I feel that I am 6 months away from needing to start dipping. This helps me raise from a position of relative comfort. The moment an investor senses that you NEED money, you are finished. So, don't ever let it get to that. Hope is not a strategy

Lots of mainline businesses do sensitivity analyses on best case cash flow, projections, worst case cash flow projections, and baseline projections. Somehow, I get the impression that super hot tech companies, or even medium hot tech companies DO NOT DO THIS. Bad move. Do a MiniMax Plan -- minimize the maximum potential downside cash flow scenario. Model in a pandemic, why not? There will be another one!

Il faut justement faire des prévisions et effectuer un suivi rigoureux des flux de trésorerie. Identifier les charges prioritaires, réduire les postes budgétaires qui peuvent l'être ou renvoyer à plus tard les dépenses qui peuvent l'être, Négocier et mettre en place les financements adaptés si cela s'avère nécessaire, négocier temporairement les délais de paiement fournisseurs...

Great insights! Planning for future cash flow fluctuations is essential for sustainable business operations. Developing a robust cash flow forecast rooted in historical data and assumptions provides a strategic roadmap. Establishing a contingency fund, spanning three to six months of operating expenses, acts as a financial safety net. Regularly revisiting and updating the cash flow plan demonstrates adaptability to changing circumstances. Proactive financial management is key to navigating uncertainties and ensuring business resilience.

Staying capital efficient from the get go is crucial, businesses at all times need to not only do whatever is possible to improve the top line but also seek tools out there that could help reduce the bottom line - because that is essentially leaving money on the table. Working with banks that provide no fees on wires, enough yield on cash but also tools like pump.co that help you save in a smart way is the way to go!

Carefully decide the payment terms to suppliers for better account payables & rework for lower receivables & timely payments from the customers Cash cycle days need reduction Also need to track the No of days in inventories in addition to the financial targets on the same

Call top 80% of your suppliers (payables) negotiate with them new paying terms say net payment from 30 days to 180 days. Show them that your business is going to pickup within that time, demonstrate past solid payment history and commitment to work together as partners in business. The worst thing a business owner can do is ignore their suppliers and just not pay them!

Three things: 1. First find out why you ended up in this situation. Till the time you find the "core" problem, your solution will most likely only be a "bandaid" solution instead of a structural change. 2. Never use short term sources for long term uses. All the other three (STS for STU, LTS for LTU and LTS for STU) are still fine. I've seen many a companies and entrepreneurs not realise the importance of this basic thing. 3. Analyse Unit Level economics / marginal contribution analysis. Remember that CF issue is an outcome and not the cause!!

Shift to VMI(Vendor managed Inventory)+consignment stocking+Avail supplier'credit Reduce the length of supply chain to match with the sales volume reduction..enter into short duration pricing contracts