During this time of crisis, we must slow the cash burn. The income that you’ll be generating is no longer there or is non-existent, so it is important to understand your cash flow.
And even with restrictions being lifted in phases, it’s prudent to be able to protect yourself to ensure you have sufficient resources – especially cash – to see you through the next few months.
So, how do you protect what you currently have and also slow down the cash burn?
1. Know your numbers
Understand what you are paying and when you are paying it. Assess if what you are paying is important or it is something you can let go for the meantime.
Forecast the cash burn rate – how much do you need daily, monthly or weekly. Knowing this will help you create a strategy to slow it down.
2. Slow the burn rate
Cancel or re-negotiate your expenses to slow it down.
Talk to your financial advisor or your bank. See if you can make deferred payments or spread out your repayments into more manageable terms.
Talk to your suppliers. Understand they may be in the same position as you are. Perhaps there is a workaround to ensure that you’re not paying for what you no longer need but can resume in phases once business revenue returns.
3. Be in control
Turn off as many auto-debit expenses and start doing it manually. By doing so, you are more in control of your expense burn rate.
Whether you are a start-up or an established business, our flexible solutions are designed to help with organising your cash flow and slowing down your burn rate.
You can get our handy Recession Response Checklist here to make sure you have solid foundations in place. Simply click here to request the checklist.