Cash is King and how to stay on top
The lifeblood of any business is the ability to consistently generate enough cash to keep existing operations going and to invest in future growth. While many business owners focus on revenue they do so at the expense of long term viability. While monitoring revenue growth is important, it is ultimately a function of accounting while cash all about operational efficiencies.
There are several key levers to deliver on cash goals and targets:
-Negotiate longer payable with vendors
-Accelerate receivables collections with key customers
-Generate efficiencies with lean program and lower variable costs
When negotiating longer terms ensure you dual source to the extent possible to increase leverage. Ask for terms if possible and have a strategy for your top spends. Sort by the highest dollar amount and begin the process
When Creating a receivables process I would recommend the book “Start with No” by Jim Camp to help develop better negotiation skills. Develop scripts for collectors and color code aged receivables while developing the ability to take credit cards where appropriate
And of course, you can develop a tactical marketing plan that delivers more in sales while increasing the price of your product. Most business owners pay little attention to pricing and each incremental improvement goes right to the bottom line
Finally, generate efficiencies by implementing a lean program. A lean program is an ongoing program for rallying your team around a commitment to eliminate wasted time, material and movement so you can dramatically improve operational efficiencies. Your business can create short term cost gains and long term competitiveness.
If you would like help with any of these strategies just call me at 262.409.7970 or email me at firstname.lastname@example.org for a free consultation.
To Your Success