Even as you’re intensely focused on getting through each day, please, for your long-term health and wealth, do not shy away from cash forecasts and doing everything possible to defend (and increase) your revenue streams.
We know many, many services companies that have recurring revenue, are in industries that are non-discretionary, or are in industries that are fairly well insulated from social distancing and coronavirus protective actions.
These companies (your company) will be the backbone of the economy during the current crisis and will lead the way to recovery.
If you are the owner or executive of one of these companies, be proactive in maintaining and growing revenue streams. Don’t fail or fall behind because you get distracted by all the commotion around you. Your employees are fearful and while they may have the skills and tech to work remotely, their home lives are chaotic. You can help best with intense FOCUS.
Cash Forecasts will Build Your Superpower
Cash forecasts for the upcoming 13 weeks (one quarter) will help you maintain focus. I can’t stress enough the value of having a clear focus on, even if the picture is ugly right now. Cash is a company’s superpower. It always has been and always will be.
Ask these questions to ensure the value of your cash forecast:
- What is the cash forecast for EACH of the next 13 weeks?
- Why that number? (Where is the revenue coming from?)
- What are you doing to make it happen?
- What is the risk that it won’t happen?
- What are your plans to mitigate that risk?
- What expenses are forecast?
- What is your cash flow picture for each week?
Once you’ve forecast each week, look at the trends over the quarter.
• Are there ups and downs?
• What can you do to mitigate them?
• Is there an increase over time or a decrease?
• What can you do to mitigate a decrease or improve an increase?
If you have ANY difficulty doing this forecast, and understanding what it is telling you, ask for help. This is the perfect time to engage a fractional CFO. I can recommend a couple of trusted advisers if you need help.
Defending revenue means doing everything possible to keep revenue coming in. This is not the time for backing off or becoming invisible. I am noticing the companies and organizations I am NOT hearing from as much as those who are keeping in touch.
Now is the time to look closely at any policy or habit your company has that delays or puts off revenue.
• Long sales cycle?
• Too much legalese?
• Lack of timeliness?
• Taking clients and customers for granted?
• Being too busy?
• Investing in lead attraction rather than investing in client retention?
Each of these policies or habits (habits most often) delays revenue and every delay reduces the likelihood of ever receiving the revenue you forecast.
Every single one of these happens on the seller side. You can change them.
Don’t hesitate to ask for help.
We’re working daily to deliver our creative support to the owners and executives of services companies. All can be delivered remotely (we’ve been doing so for more than a decade), so there’s no reason not to get advice or help. We’ll work to the level of intensity that you prefer, from advice and recommendations to deep dives into all the details. All fees are aligned with the value you receive and your company’s size. Send an email or give us a call because no owner should forecast cash and defend revenue alone. 703-801-0345.