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Ep67 Transcript: 4 Tips to Surviving a Cash Flow Crunch in Your Business – Quick Fix Friday
Cash flow crunches in a business can be a scary thing. In episode 64, I talked to my friend Susan Frew, who was a million dollars in debt in her heating and plumbing business. Hopefully, your cash flow crunch isn’t quite as bad as that. But in today’s Quick Fix Friday, I’m going to give you some tips on how to deal with a cash flow crunch.
Hello Dreamers. Welcome to the Late Starters Club, giving you the inspiration mindset and tools you need to start something midlife and beyond. Remember, it’s never too late to follow your dreams.
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I’ve been in business for 14 years and I have had my share of cash flow crunches as well.
Whoopsy, daisy, where did all the cash go? Oh, shoot.
It can be a difficult time with an unexpected expense that comes up. Or maybe just some things happened with some clients or projects that didn’t work out exactly the way you wanted. The key, of course, is to have three months’ reserve and cash so that you don’t run into this problem in the first place.
But that’s not really helpful if you’re in the middle of it and some unexpected things have happened.
So tip number one is what can you launch or promote quickly to get more cash in the door? Now, this might seem obvious, but sometimes we ignore that when we’re thinking about where you’re going to get that cash.
So I like to call this the fastest path to cash, and oftentimes it can be something like consulting or maybe a special promotion on something that you have. Maybe it’s a special bundle that’s something new that you’re going to launch that’s really easy to put together quickly. It could also be making calls to past clients or touching base with people to find out where they’re at, follow up on some of the leads that maybe you’ve dropped, and just check in with people see if they’re ready to buy Now.
Tip number two is to offer a discount for people who pay up front or buy in bulk, for example. So this can be a great new package that you offer. And maybe offer it, with a special pricing on paying a larger sum quicker. You can do that even with current clients and offer them some special deal and they might take you up on it.
Tip number three is to, of course, put off payments on anything that is non-essential or see if you can restructure your payments with some current vendors that you are working with. Check into your expenses and see where you might have a place to put something on hold or cancel something.
And then tip number four is see if you can tap into a line of credit. And that might mean just changing the way you pay your credit cards or tapping into some potential loan. Now you have to do this very carefully because you want to make sure that your cash flow crunch is temporary and not just a longer-term downturn in your business because then you’re going to get yourself into more trouble by having some additional payments in the future. So be very careful with that last tip.
Now, in Susan’s case, she went out and got a second job, so, I don’t know if I would recommend that necessarily if it’s going to take you too far away from your current business, but it might be something you could look into. Is there something that you could do easily on the side, a little side hustle to bring up your income temporarily, and if you’ve been in a cash flow crunch in a business, Don’t worry, we’ve all been there.
Just make sure you have a plan going forward and bring up that savings so that you don’t have to worry about this in the future.
Hope that was helpful, and make sure you grab the free guide. Top Tools for Late Starters on the website at latestartersclub.com and let’s turn dreaming into doing.
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