Got a Cash Flow Crisis in your business? 4 important moves to make NOW

What do you do when your business is in a cash flow crisis? Maybe it’s an internal issue, like a decrease in sales, or maybe it’s something out of your control, like inflation or world events.

Nobody likes to think about it, but truth is that no matter what is going on with the economy, the market, or the world, most of us face some sort of business crisis at some point. This usually means a Cash Flow hit of some kind.

But there is good news here…

There are many ways to “pivot” your business when things go wrong. It’s just a matter of using your skills and shifting your finances.

I know that sounds WAY oversimplified. But no matter what, there ARE ways to stop a cash flow crisis. It’s just knowing what you need and what moves to make.

Again, I know this sounds obvious! But stay with me here, and I’ll tell you what I mean, and how you can help your business get back on track if things go wrong.

Ever since the pandemic, I’ve seem many business owners get a lot more conscious of their financial situation. People are looking for a better “big picture” view, and are making longer-term plans than they did before.

I’ve also seen more business owners get real about planing for any unexpected situations, from market shifts to world events. This is a great thing!

Still, sometimes no matter how far ahead you plan, there are STILL surprises in business that can send your Cash Flow into a tailspin. So what can you do to get back on track? I’m glad you asked!

Read on and I’ll share my top 5 tips to get your business out of a cash flow crisis. You can use these steps right away if you need to, OR have them in place for a rainy day.

Note: there are some affiliate links below, and they’re all for products and services I both use and love! 😉

Here are 5 simple steps you can take in case of business cash flow crisis.

Step 1- Evaluate your current budget

Print out your statements, both personal and business. Then mark each spending areas into these categories:

• Lifestyle (wants)

• Needs (includes minimum payment requirements for debt)

• Investments (retirement, savings, etc)

• Additional Debt Payoff (on top of minimum payments)

Now, look at your spending in each of these categories. It’ll help you see what your priorities have been, and take appropriate action toward what matters most to you NOW.

So you know your wants and needs in each category. How do you choose what to cut and what to keep when it comes to cash flow?

Step 2- What to cut and what to keep

Where to start in cutting costs? Start by cutting glaring “extras” like meals out or travel costs. Downgrade that recurring software that was upgraded after the trial basis.  (I saved one client $2,500/yr in recurring subscriptions not used).

This is the perfect time to stop paying for what is no longer serving your cash flow or your budget. Take an assessment and let go of some of the more obvious extraneous expenses you can find.

Step 3-Make an ASK List.

If there is something that you need to keep but it’s not in the budget right now, ask for help! Here’s what I mean by that…

Ask for refunds for that travel package, or the deposit you put down on something. Call your bank and ask them to waive monthly fees. See if you can negotiate with debtors to temporarily skip or delay payments.

Ask for help in any way, and you might be surprised what people are willing to do for you!

A lot of banks and loan providers (especially federally backed ones) are often willing to delay or straight up forgive loan payments in certain circumstances. So If you’re struggling, call and ask if they are offering any assistance. And if not, be sure to ask about any other alternatives.

Note that the “ask” thing also applies to software subscriptions! So if you need to keep a service for your business, contact your provider and see what they can do for you. You might be pleasantly surprised at what they can offer.

Here are a few other places to consider asking for help:

Payroll Pause. If you run payroll in your own company, take note of this. Payroll providers like Gusto, my preferred payroll company have offered in the past what they call a “payroll pause.” This allows you to literally put your payroll on pause (wages and payroll fees). They also make it easy to defer payroll tax payments with one click.

Find out if your payroll provider does anything like this. And if not, you can always ask for assistance in another way. 😉

Insurance: While insurance is usually one of the first expenses to go when your budget is tight, do what you can to keep it.

Now, full disclosure: I would not recommend becoming even more vulnerable by removing your layers of protection in any area right now (health, car, business, etc.). But I would highly suggest you review your coverage and make adjustments as needed.

For example, you might be able to switch your car insurance to storage rates. Or lower your bill because of your lowered liability risk. For health insurance, if you are paying through the state and your income has declined, you might qualify for a higher subsidy.

Phone: If you are still leasing your cell phone check out how to potentially save $500/year . (You’ll also find several other tips in this post to save up to 10K per year without on this post. Check it out and pick up even more money-saving tips!)

Inventory: Instead of purchasing more items to hold in stock, use up your inventory reserves first. If you sell items, you can put them on a temporary “back order” to gauge demand. You can also put items “pre-order” to test demand without having to incur a possible expense as opposed to an investment. 

Step 4-Create a crisis budget and a post-crisis budget.

This is a step you do NOT want to skip!

Now that you have your budget set to get you through the crisis, be sure to create a separate post-crisis budget. This way you’ll be ready to roll, and be less likely to overspend when you’ve gotten back to a stable place.

You’ll also be creating a budget to step into that reflects your long-term priorities and desires. This is the goal!

Pro tip: If your current cash flow allows for it, pre-purchase gift cards for things you want later. It’s a fun way to anticipate a “reward” while defraying lifestyle expenses on down the road.

These are just a few ways to revisit your cash flow and make important updates! There are many more possibilities that you’re likely to see, too.

Always remember, a cash flow crisis, like everything else, will pass.

If you find yourself needing to use any or all of these moves, don’t despair! It happens to every business at some point, and it will come to a resolution. Now is simply the time to look at where you are, create new priorities, and make adjustments as you need to.

Pretty good plan to have in your business no matter what your circumstances are, right?

Keep moving forward, and keep looking out for creative ways to improve your cash flow. It’ll help you come out even stronger on the other side, and ready for whatever happens next!

Now, how about you? Have you ever been in a cash flow crisis and found creative ways to cut costs and shift in a positive direction? Are you struggling now and plan to use any of these moves to get back on track?

I would love to hear from you!

Until next time…

Love, Light, and MONEY, Honey…

Kaylee