Financial management

5 cash flow tips for today

- September 21, 2020 3 MIN READ

Cash flow, the lifeblood of business, is often a challenge when business is going well. It’s even more of a challenge during these current circumstances with lockdowns, shutdowns and people staying at home.

My 5 tips for today to help you through the next few weeks:

1. Make lists of what you need to buy

My parents are both 94 years of age and between my sister and my husband we’ve been doing their food shopping for them. They have always written shopping lists for as long as I can remember.
But what’s really interesting, is they told me the other day that they are spending less money than usual. Why? Because even though they’ve shopped with a list, when they’re in the shops themselves, they’ll see something that wasn’t on the list. It may be something that they need. Or it may be something they think they could have that for lunch one day for a change. So each week, they’d buy more than was on their list.
By making a list and sticking to it, you’ll save yourself money.

2. Cut out any non-essential costs.

Whilst you may already have done a fair bit of this by now, have another look at where you’re spending your money.

If you’re really tight for cash, forgo the takeaway dinners or the coffee from the local cafe. I know we need to be supporting our local businesses, but let those who are still working be the ones to do so.
A colleague of mine mentioned they’d had takeaway dinner for the first time in 5 weeks the other day. Why? Because money is tight in that household and they’re needing to save every penny to pay the essential bills.
Another colleague of mine goes to his favourite local cafe and picks up a coffee and pastry for breakfast every day. Why? Because he can afford to do so.
Non-essential costs for one person may be an essential cost for another. Consider what is right for you.

3. Check what grants and support are available for you.

There are many options available if you just spend a bit of time researching them. Some are specifically COVID related support packages. There are others, though, that are grants that are generally available and it may be that you are eligible. Now you have time to check into what is available, whereas before you were too busy working to think about it.
There are grants (that you won’t have to repay) and others which are funding with deferred repayments.

4. Take stock of what you have

Keep a record of what financial resources you have available to you. This would include funds in the business bank account, personal funds, mortgage offset account balance, the amount available for redraw on your mortgage, available limits on credit cards to name the obvious ones.

But there may be other items to add to the list, like investments in shares, superannuation balances. Then there are the personal assets like artwork, jewelry, collections you own. Whilst you won’t want to sell up many of these items, it’s worth noting what you have.
I’ve always found that when I know there are funds available if I really need them, or something I could sell at a pinch, my stress levels reduce.
Hopefully, you have what I call a “stash of cash”; a buffer of funds in a bank account that could pay your bills for a few months. If you don’t, then the list above may give you some idea of what you’ve got available to you.

5. Spend any support funding wisely

If you’re eligible for the cash boost for business or any of the grants for business, spend it wisely. Make sure you’ve negotiated the reduced rent on your business premises, entered into payment arrangements with your suppliers, eliminated all non-essential costs. That way, whilst you’re entitled to the funding, look to put some away to help you re-start the business when you can down the track.

The key is to focus on minimising costs, obtaining whatever funding you’re eligible for and building up a stash of cash to help re-start your business.

This post was written by Amanda Fisher, founder of Amanda Fisher, Cash Flow Queen and is republished here with permission.