I am besieged with cashflow problems and worried sick. Help!

Dear Aunty B,

My business is 10 years old and after the first two years I did not have to worry about money and have loved every minute of it.

But this year I have been besieged with cashflow problems because some clients who have always been reliable are paying late, and with the most inventive excuses I have ever heard. I am not going to tell you how low we got last week.

I know we will get through because we have good long term contracts in place and good relationships with our customers and suppliers. But our inquiry level is lower and cashflow bumpy.

It is the stress that I am worried about, and I am sick of being worried as I don’t know how long the situation will last. I also had an opportunity to sell two years ago and didn’t, so I am kicking myself.

Have you got any suggestions?

CL,
Brisbane

Dear CL,

It’s a bit of a shock, isn’t it? You always have lots to worry about in a small business, but when that cashflow gets unreliable, it is a different level of stress.

But you know exactly what you have to do. Turn your stress into action, and here are the two things you need to do immediately.

You need to look at how to get that cash in the door faster, which means reviewing your cashflow processes, invoice and collection. It can always be done better.

Do you need extra facilities to back you up? Banks are still providing facilities for companies with long term contracts like yours.

You also need to work the pipeline harder. That means paying a lot of attention to the sales and marketing side of things. Are your sales team doing all they can to attract new inquiries and convert? Are you spending enough on your marketing?

CL, you just have to do what the rest of us are doing – you have to hold your nerve. Come to work every day and push everything along a bit at a time. You know you are going to make it out the other end, even if that bank account looks lower than it has for the past eight years.

I know the stress can be hard going, but look deep inside yourself. You had the courage to start and grow this business. You will find the courage to go on. You will discover a strength you never thought you had, and you and your company will emerge from this in far better shape. Trust me!

Your Aunty B.

What are you waiting for? Email your questions, problems and issues to auntyb@smartcompany.com.au right now!