In these challenging economic times, managing cash is job one. We all know, when we run out of cash, the game is over. The best place to start your cash management process is creating a plan. Start your plan with a forecast of realistic revenues for the next four quarters. If you have a CRM system, this step is relatively easy to do. If you do not have a CRM system, create a sales funnel listing each revenue source and payment expectations. Next, identify gross margins (the difference between sales price and total costs: cost of goods sold and sales and general administrative costs). Hopefully, you are cash positive for the foreseeable future.
If you have a negative cash projection, this is the time in your cash management process to get help from an experienced financial project provider. Find someone on the outside that can help you make the tough decisions you need to make to stay afloat until the economy changes or until you can make the necessary internal changes to succeed. Remember the thinking you need to get out of this negative situation is not the same as what got you here in the first place. Outsourcing to highly skilled financial expertise is the most cost effective method of reserving cash and managing through tough times. Hiring outside contractors with years of experience to help you is also smart business. It is extremely difficult for any senior to be objective in highly stressful situations. Having a trusted and highly skilled provider at your side will make the cash management process easier, especially if you have to make tough decisions cutting expenses to survive. For more information about the best ways to outsource your projects, please contact GMO. Remember cash is the life force of your business. If you run out of cash, you die.