We’ve been in business here at Your VA since 1998 and for the first time in a long time, cashflow feels like a crisis.
August is another quarter when both provisional and GST is due and I’ve been losing sleep over it. It’s not even due to Covid, but it has been a quarter of high investment and these expenses mean our normal cash buffer doesn’t exist right now.
I also know I’m not the only business owner worrying about this at the moment and with more uncertain times ahead let’s look at some ways to sleep a bit easier while still meeting our commitments.
Stay safe and look after yourself.
Justine
Face the facts head on
While burying our head in the sand and hoping for the best is one strategy, it’s not going to help you sleep at night!
Be prepared with the actual facts. Know:
- Your outgoings this month
- Your receivables due
- Your overdues!
Having those figures in front of you takes the guesswork out of your cashflow crisis and helps you make the decisions you need to make.
Evaluate your outgoings
Some of your expenses will be fixed and in the short term these are outside of your control. However you’ll be able to defer or eliminate some of them effective immediately.
Run a tight ship and for now at least, eliminate what isn’t fixed or generating revenue.
“Nice Haves” no, “Must Haves” yes.
Pay your tax in instalments
I’ve just changed our provisional payments to fortnightly instalments, no more quarterly heart palpitations!
It took less than 5 minutes to organise through myIR login and both the frequency and amount is flexible.
Talk to your bank
Arrange a short term load or overdraft facility to take the pressure off. Most banks will give you an indication over the phone and if you make the calls now, it’s an option you can take as and if you need it (knowing you have options).
Credit Control!
Our credit control VA’s are run off their feet at the moment (so know you’re not alone!).
Outsourcing your debt collection can improve results, not to mention anxiety levels if chasing money isn’t your thing.
We agree on a strategy with the client and go through their receivables list with them to get backgrounds and applicable notes. I’m a strong believer in having someone other than the business owner (particularly if you’re in charge of sales, marketing or building relationships) responsible for credit control. The results support this … even at here where I get Hazel to manage our own debt collection.
Increase Revenue Generating Actions
Marketing is often one of the first expenses business owners cut back on, but think about low hanging fruit you can take advantage of to bring in some revenue quickly.
Suggestions include:
- Running a Facebook ad to promote a new product or service.
- Touching base with previous clients to check in with them and see if they need anything.
- Running a competition.
- Creating a bonus launch for your online course.
- Creating a mini course.
- Surveying your clients to see how they are tracking and what their pain points are at the moment.
- Create a new offering.
- Brainstorm with your team.
- Embrace and leverage ecommerce.
- Create a subscription or membership model.
- Launch a referral programme.
- Run search engine ads.
- Run retargeting ads.
- Improve your lead magnet conversion rates. Actually go mad, improve your whole sales funnel!
That’s just a few, like we mentioned in the list above … your greatest actions will come from your team. Or if you’re on this journey alone right now, your virtual team / coaches / network / friends … you get the picture!
Don't leave things to the last minute
By trying some of the tips above you’ll know with certainty whether you will have the cash to pay your tax, payroll or suppliers this month.
Proactive is 100% better than being reactive when it comes to managing your cashflow in a crisis. Leaving things to the last minute will only amplify your anxiety … and that’s the last thing any business owner needs. More anxiety!
