To help portfolio companies manage cash flow during tough times, start with immediate action steps. First, review and tighten spending across all departments, focusing on essential operations only. Help companies negotiate better payment terms with suppliers while trying to collect receivables faster. Guide them in building a 12-month cash runway plan, including multiple scenarios for different economic conditions. Consider alternative funding sources like invoice financing or inventory-backed loans. Most importantly, help them identify and protect their core revenue streams. Encourage strategic cost-cutting rather than blind slashing – maintain investments in key growth areas while trimming non-essential expenses.

To help your portfolio companies handle cash flow struggles during downturns consider strategies like zero-based budgeting cutting costs by 10 to 15 percent by justifying every expense group purchasing is key leverage bulk buying across your portfolio for 5 to 10 percent savings shared services can cut overhead by 25 percent through shared hr legal and accounting accelerate receivables by offering discounts for early payments vendor negotiations mean you can stretch payables and improve cash flow smart proactive management can boost liquidity by 15 to 30 percent this is how #VentureCapital drives #BusinessGrowth with #CashFlowManagement and smart #StartupFinance #InvestorTips

The question is how to turn cash flow struggles into an advantage during economic downturns. Start by burn rate—knowing exactly where the money is going is the first step to regaining control. Help them trim unnecessary costs and focus on activities that generate positive cash flow. Renegotiating payment terms with suppliers and extending the timeline on receivables can give much-needed breathing room. At the same time, explore alternative funding options like bridge loans to keep things moving without draining reserves. Encourage them to rethink their offerings and identify new revenue streams that align with the current market landscape. Loyalty programs can also help secure repeat business and ensure more predictable income.

To help portfolio companies combat cash flow during economic downturns You can use a multi-pronged strategy: Cash flow management: Promote regular cash flow forecasts and review expenses. Identify areas to reduce expenses Access to funds: Help secure emergency funds and find grants or government relief programs. Revenue Diversification: Explore new markets to meet changing needs and promote product or service innovation. Cost Reduction Strategy: Discuss Temporary Layoffs Negotiating new supplier terms and reducing unnecessary costs Strengthening customer relationships: Encouraging transparent communication and flexible payment options. Strategic cooperation: Suggestions for forming coalitions to share resources.

1. Do a sanity check and go understand all your revenue and cost drivers 2. Work with your teams to understand how to find ways to drive more revenue and create efficiencies in costs (in a globalized world - hiring talent abroad can be very smart). 3. Remember long term - finding ways to drive revenue will be better and longer lasting than trying to cut too many costs. 4. Explore temporary funding solutions.