CEO Wavelength
Conquering Cashflow
March 2025
If Cashflow isn’t one of the most trending words for SMBs for 2025, well, call us surprised. Diplomacy via tariffs has many businesses scrambling to ensure cashflow will be protected.
Where to begin.
Having good cashflow starts by grabbing the problem at the right end: check your Business goals. Are they clear and achievable in the short through long term? Are you goals backed up by not just good data but also future business insights that contemplate scenarios – good and not so good, and a plan of action for most probable scenarios.
Where things get spicy.
Pricing strategy. Are you competing on price or value or is it both but lowest price is what wins (which means you are competing on price) and how are you doing, securing customers based on your pricing? Do you have the right customers that value your goods/service offerings by paying your market price and paying on time, based on the agreed upon terms and conditions? What about margins – do you have good margins to cover your costs and room for some profit when you have set your pricing strategy?
Maybe more to the point: are your perceived margins your actual margins or are you finding that your costs aren’t full factored into your price and you are learning through tight cash flow your cost of business is bigger than expected?
Payment terms. When’s the last time you looked at your payment terms? Are payment terms helping or hindering your cashflow needs?
Budget. Do you have a leaky budget? This is worse than a leaky roof. Do you have all costs in? Cost controls? Reasonably achievable revenues? Buffer room in case revenues come in lower? What about a contingency plan – do you have one ready implement in case your revenues come in lower or/and costs come in higher to balance the money coming in the door out the door?
How quick can cash flow improve?
With a plan of action - Fast. Like, real fast. Some firms experience the results of a turnaround within months. Even Ebitda can bounce up significantly with a plan prepared and executed right. Call in expertise to help. It’s never too late to start.
