Understanding How Enterprises Cope With The Crisis Of Cash Flow

　　 First, return to core business.

If your business has been very successful, but now it is plagued by cash shortage, I am sure I know your problem: you have deviated from the core business and diversified business.

I have a good friend who worked as a business consultant in a national consulting company. His job is to go to the company to investigate the problems of the company. He told me, "Roger, almost every time I arrive on the first day of the company, I find their problems. But I can't tell them right away because I want to make them feel that the huge advisory fees we are about to send to them are worth the money. I usually work hard for weeks and then tell them.

"If that company is big enough to pay our consulting fees, that means they have been very successful. Their problem is: they have deviated from their core businesses and are developing diversified businesses.

"Perhaps their desire for development is too urgent and unnecessary. Perhaps they are bored and eager to meet new challenges. Or they have created a savior complex. They are convinced that they are so perfect that no matter what they do, they will never fail. My advice has always been this: cut off the sideline and return to the core business.

Is this proposal applicable to your business? Do you have to expand the product category or service scale and have to take the main business income to fill the deficit of the sub business?

　 Two, control expenditure

The next step is to control your spending. You must delay all capital expenditures - not new equipment, no unnecessary travel or purchase, unless they can generate revenue. Of course you have to take the lead and control your spending. You have to let all employees know that every sum of more than 20 dollars must be approved by you.

However, it can not be overdone. Don't let your employees feel depressed because of a little money. They need pen and paper as well as phone calls. What you need to do is to control larger projects, such as travel, long-distance calls and equipment purchase, but the premise is not to hamper the daily work of employees.

　　 Three, for you. bill Prioritizing

Next, you need to check all your bills and prioritize them like this:

A, pay immediately, otherwise shut down. These bills include office expenses, telephone charges and network charges.

B, critical expenses (such as rent). Contact them and make use of your negotiating skills to make concessions to you. In the face of cash flow crisis, it is easy to think that certain things (like rental fees) are not negotiable. Don't think so. Everything can be renegotiated.

C, do not pay at the moment (such as the seller's money, printing fees and bonuses, etc.).

When the two categories of B and C bills exceed the scheduled payment period of 30 days, you need to contact the relevant people and explain to them that some cash flow problems have been caused by some key customers' dishonesty. The important thing is that you must contact them before they make a phone call to complain. If you can't get in touch with them before calling, you have to explain to them.

You must stand firm in this matter. Resist all temptations, refuse to pay the goods to the already angry sellers, and refuse to pay the small bills that you want to pay because you can afford them. You have to postpone paying these bills so that you can accumulate the necessary capital flow. Do not agree with any request for additional interest on deferred payment. If the seller wants to impose penalties on you, tell them forcefully that doing so will only lead you to deeper difficulties, and you can not agree with them.

Larger creditors may ask you to sign a personal loan guarantee because of the delay in the repayment period. You can never do that.

　　 Four. A bonus

It is unreasonable to pay dividends without profit. You can still get a normal salary or reimbursement for travel expenses, but you can't get a bonus. You must delay the loss of cash. Of course, other shareholders and investors should do the same.

　　 Five. Pre arrange the credit limit.

If you have financial backing, go to them now and explain to them the problems you have encountered, especially in detail about the actions you will take to solve the problem. Tell them you don't want to spend the money, but you need to know if you can get the money if you need it.

Try to get some credit from the bank and use it when needed. Don't sign any personal guarantees.

　　 Six, keep cheerful, calm and confident.

There is a common saying about sailing: "sailors must never see fear in the eyes of the captain." Now is the time to show your leadership skills and talents. Don't show your anxiety even for your closest employees. Let them know that you have problems, and you know how to deal with them. You are taking some difficult measures at the moment, but everything will be fine.

Remember that anxiety does not solve any problem. Focus on solving problems rather than problems.

　　 Seven, avoid repeating the same mistakes in the future.

After getting away from the cash flow crisis, you need to take the necessary actions to avoid repeating the same mistakes in the future. Most people will be cautious when they get out of trouble and avoid cash flow problems at all costs. Let's talk about what you should do.

You have to make a personal financial plan. You can't think this way: "I used to get rid of it all the time, and I can still deal with such problems." We admit that you may not be so careful about making detailed financial plans. This may not be your style. Maybe you think you are an adventurous person, and your success is just because other people don't have the courage to take risks like you do. Forget about it. You really need a written personal financial plan.

If this is the last thing you want to do in the world, then you need to find someone to do it for you. You need a person to warn you when you are about to have cash flow problems.

　　 Eight, the money in the pocket is not panic.

It sounds too popular, but now you should start saving money for the future.

For those young people who can't get rich overnight, if they can avoid using credit card overdraft and restrain themselves from having cash to buy things again, then they will have millions of dollars in the future.

If you own a company, the same is true. You should take a small part of your earnings to buy dynamic investment funds so that you can avoid cash flow crises in the future.