Cash Accumulation Is More Important Than Ever
What does cash do for a company? It certainly helps cover expenses during times of reduced revenue. CPAs often recommend enough cash to cover expenses for three to six months. Cash is more valuable than that: cash gives a company superpowers and should be accumulated for reasons far beyond providing a cushion in case of slow down of revenue.
During our current pandemic, owners and executives should focus more than ever on cash accumulation.
I’ve written that the best business growth strategies are those that help your company accumulate cash.
- Don’t be sales rich and cash poor.
- Ensure that your sales processes generate cash early and without fail.
- Consider the benefits of retaining more cash in the business and paying more taxes.
Now is the time to re-commit to an intense focus on unlimited cash accumulation so that at the end of the current situation your company is still capable of growth.
What to Do Starting Now
Services companies, especially those whose services are primarily derived from intellectual property and intellectual capital, should continue doing business with an emphasis on the future.
Maintain or boost your communication with your clients and customers. This is a great time for Appreciation and Why Stay? messages, plus what we call Top of Mind content. It’s not the time to go all in on sales pitches.
Focus your personalized conversations (by phone or video conferencing) on client needs in the coming months. I advise ensuring that the conversation is about outcomes a few months from now rather than only on pain relief today.
Long ago I realized that when you sell pain relief, as soon as the pain goes away, the buyer doesn’t need you any more. Don’t be that company today. Look to the future and provide value on the other side of the situation.
Owners are people too, and certainly many will have anxiety about the personal areas of their life as well as about the business. Help yourself and others by being the most human you can be, giving your employees and buyers the opportunity to express their concerns, and then being ready to support them and move forward. The deepest recesses of your company culture may rise to the top these days, and you need to be ready to deal with them, not bury them or brush them off. Anxiety hinders performance and having no outlet for that anxiety hinders performance to a greater degree.
Trivers Consulting is Here for You
We have been doing the bulk of our consulting and advising work remotely for more than ten years. We work with our client companies’ technology and capabilities. Whatever your technology, we’ll work with it.
- We will help you prioritize your work under the current conditions by talking with you about your immediate and longer terms needs and expectations.
- We will write and help you schedule your communications with clients and customers.
- We’ll brainstorm ways to serve your clients and customers during this period when nothing is normal.
If you’re interested in a deep dive for long term growth, we offer our Growth Methodology analysis. It’s an assessment of your Strategy, Operations and Financial functions and the factors within each area. The outcome is a report that details your company’s strengths (to build on); your gaps (between factors or between functions); and where you have trapped opportunities (are your offerings taking full advantage of your knowledge and expertise?).
Balancing the needs presented by the immediate situation with a focus on the future is a challenge. We are ready to help you as needed. And we wish you, your family and your company safety and health.