With businesses struggling to survive, cash flow and options to generate revenue have been top of mind for many businesses, especially if the tried and true might no longer be viable – in our current circumstances. Here, we suggest some strategies that might be interim measures, that could keep businesses afloat.

 

Following the online webinar titled, Fishbowl Conversation, organised by the Barbados Coalition of Services Industries, which was held on 29 April, a second instalment was held this past Wednesday, 29 April. Once again, the theme was “Leveraging Digital Technologies”, but the emphasis was on sharing practical tools and solutions that business owners, particularly micro, small and medium enterprises, could apply.

As was noted in last week’s article, 4 considerations to leverage digital technologies through and beyond COVID-19, there is a sense of panic in the business community, as the impact of social distancing and self-quarantining are being implemented, and economies begin contract. Many businesses are struggling to stay afloat, which not only means struggling to cover their operating expenses, but also paying salaries, which of course, affects households and families.

As an uncertain future lies before us, increasingly people and organisations may need to rely on stop gaps – interim measures – to help them stay afloat get through this difficult time. Three strategies are outlined below, which were mentioned during this Wednesday’s Fishbowl Conversation; however, numerous suggestions and recommendations were made throughout the course of webinar, and so is well worth your time.

1.  Chase down outstanding receivables

When work or sales are plentiful and the business has decent cash flow, it can easy to forget to invoice clients for products or services delivered. Depending on the size of the business, such administrative matters – generating invoices, chasing up payment and ensuring that the accounts are up to date – can be a chore, and can consume a considerable amount of time, which could be better spent securing or executing paying work. However, it is that very focus on paying work that can cause businesses not to get paid.

Even if the invoices are generated and sent to the client, some follow up might be needed, in order to ensure that payment is received and receivables are managed. If these things are not done, and are not done consistently, it possible for the business to be out of pocket by tens, or even hundreds, of thousands of dollars over the course of a few months.

Hence, if cash flow is getting tight, revisit the business accounts, along with the confirmed orders, contracts, or projects. Thereafter, verify whether those activities or transactions had been successfully completed, and the requisite payments had been received. For all transactions that were not completed, and for which the status is not clear, it is recommended that they be investigated to determine the reason, and whether there is sufficient justification to engage the client to secure partial or full payment of outstanding amounts.

 

2.  Consider procurement opportunities

Although the business is supposed to be providing certain goods and/or services for identified, in these unusual times, short-term procurement opportunities could be explored. These opportunities could range from consulting or advisory services, providing the services specified, or executing works.

In circumstances, where there might not be an immediate match between the products or services offered by the business, examine whether skills resident by the staff of the business, especially the management team, could be leveraged for those opportunities, For example, even if a business produces soap, a broad range of skills and experience are likely to be present in the business, such as management, accounting, human resource management, chemistry, product testing, process management and logistics, to name a few.

In addition to ICT Pulse, I manage an online platform called Project Calls, where we collate short-term project opportunities from across the Caribbean region, with the objective of making them easier to find,  thereby saving our subscribers several hours a week trying to find the latest tenders and solicitation notices.

Although we are in the throes of a pandemic, project opportunities are still being advertised. On Project Calls, two email notices are disseminated each week with the latest opportunities, and although they might be as plentiful as they were pre-COVID-19, in each email there are at least 12 to 20 new listings, which could be a currently untapped revenue stream for some businesses.

 

3.  Offer gift cards and prepaid packages

Finally, for businesses that are geared towards people purchasing the products or services, offering attractive prepaid gift cards or gift certificates could be a way of increasing the cash flow current. This suggestion is variation Gustazos, an online platform that provides discounts on a broad range of products and services. To date, the platform is effective in the Canary Islands, the Dominican Republic, Jamaica, Panama, Puerto Rico, and Trinidad and Tobago. On the Jamaica sub-site, discounted hotel rooms, meals at restaurants, beauty treatments, tend to be on offer, but even online classes, gym memberships, computer repairs and software installation have been on offer.

High touch businesses, such as those in the beauty and wellness, and those in food and catering, in particular, may find this strategy attractive. Attractive packages could be offered, for which individuals would pay in advance, but which would be redeemed at the appropriate time – consistent with the rules and guidelines prescribed by the Government.

Successful implementation of this option could provide a business with much-needed revenue, when the traditional routes might not be available or viable. However, it is crucial that these prepaid packages are honoured. There is still uncertainty about when the normal course of business might resume, and it may be several weeks before purchasers might be able to redeem their package. It is thus important to assure purchasers that they will be able redeem their package, if the timelines initially stipulated were made ineffective due external rules and constraints.

 

 

Image credit:  Gino Crescoli (Pixabay) 

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