In this third part let’s look at these three things count, collect, and conserve your cash. What do I mean by counting your cash? Literally, you want to be looking at your cash balance or cash flow statement at least every single week. In a crisis, cash is king. Cash is what is going to help you get through this period of time. So, you want to be cautious about how your cash flow is flowing. And the best way to stay on top of it is looking at your where cash coming in and where is the cash flowing out?
The only way your business would die is if you run out of cash. So, count your cash every single day. Then at the same time, you want to collect as much cash as possible. Look at your accounts receivable who is owing to your money?
You want to collect all that money and at the same time, you want to go back and negotiate with all your vendors anyone that you’re buying from you want to negotiate your accounts payable. So, it’s very simple you want to have as little accounts receivable as possible. You don’t want anyone owing you any money. At the same time, accounts payable you want to renegotiate the terms. Can you spread the payments into multiple payments? Can you pay them a little bit later? Let’s say right now you’re paying them in 30 days, can you go back and negotiate 45 days, 60 days?
You want to conserve that cash. You want to conserve that cash as much as possible because we don’t know how long this will last. No one knows where we’re going next and no one knows when we are going to bounce back. It doesn’t matter, as long as you have the cash you are okay.
So, conserve that cash. Use every mean necessary to conserve cash. cash is the lifeblood of your business.