Cash is king as businesses return to the ‘new normal’

Many business owners would agree that 2020 is turning out to be one of the most challenging periods in modern history.

And one thing is now essential for all businesses that have survived the coronavirus lockdown and wish to get up and running again – cashflow.

Darren Peacock, owner of Peacock Finance, explained: “It might sound like a cliché, but right now it’s truer than ever – cash is king.” So, what should SMEs be asking themselves now?

Darren said: “Now is the time to review your entire operation. Is your workforce as lean as it could be?

Can you reduce your spending?

“Analyse your costs, strip out non-essential expenses, re-negotiate contracts, and understand where your sales are coming from.

“Whatever strategy you plan, one thing that remains critical is cashflow.”

Darren recommends ensuring your management information is as up-to-date as possible. He said: “You need a good accountancy system with live information. As a minimum, in the first week of the month, check your previous month’s figures. You need to know where your break-even point is, which is the point in the month at which you’ve paid all your expenses and are profitable. Then you can start to look at where improvements can be made.

“It’s essential to have a cashflow forecast. Businesses with amazing sales are still at risk of going under if the cash isn’t right.”

Darren is an expert when it comes to helping SMEs deal with cash shortfalls, but admits it’s a much simpler problem to solve when it is picked up early.

“These might feel like uncertain times, but with support from people with the right knowledge, your business will quickly get back on track.”

You can read Darren’s full advice on handling your cash in his latest blog at www.peacockfinance.co.uk. For funding advice, contact him on 07739 615859 or via Darren.peacock@peacockfinance.co.uk