Times are tough. As an unpredictable virus makes its way around the world, closing economies and shutting borders, there are bound to be casualties from a business perspective. Currently, 41.3% of businesses report they are closed, while a survey from pnas.org highlights that COVID-19 is the main reason for the shift.
It’s clear that you need to take drastic action, especially if the crisis has hit you hard. The trick is to choose the ways to supplement your cash flow and budget wisely. Otherwise, you may do more damage.
These are the four areas to target if the Coronavirus is making your ability to turn a profit a challenge.
Turn Assets Into Cash
The best option is to turn assets into cash. Thankfully, the pandemic has rendered a handful of valuable resources unimportant, such as business premises. By selling the building, if you’re the owner, or negotiating a quick exit if you’re a renter, you can free up funds to spend elsewhere. Home-based companies have an option, too. If you try BestOfferKC.com, you may be able to sell up and downsize. Or, if that’s not suitable, you can consider selling any equity you may have to a lender for a quick cash injection.
Leverage Unpaid Invoices
You see unpaid invoices as stressful, whereas a buyer views it differently. To some companies, they are assets because it’s easy money. After all, there’s no doubt the cash is owed, so it’s not as if they are in the wrong. Plus, they usually have the tools, such as human resources and surveillance, to make it harder for people to dodge repayment. Some even go to court to recover the debts they buy from businesses and individuals. How they do it isn’t your concern. What does interest you is how much they’ll pay as you can use the funds as a type of bridge loan.
Factoring your invoices and leveraging them are two very similar concepts. But, there is a difference. The main one is that the latter is when you hand over all the responsibility to the person who takes on the unpaid invoices. The former means that you continue to be responsible for collecting payments from your clients and have to repay your lender. Before you dismiss this tactic, please remember invoice factoring enables you to take out a bigger line of credit. Typically, it’s around 90% of the total invoices.
Ask for Help
During unprecedented times, the community spirit is stronger than ever. You only have to look around the world to see the millions of people who clapped for the emergency services. Okay, you don’t save lives, but consumers still understand that you’re in a perilous position, which is why you should give them the option to lend a hand. Asking for shoppers to buy products and services that you’ll fulfill in the future is an excellent way to boost cash flow levels. Plus, it’s not as if people will fail to get anything for their purchases.
Hopefully, you’re not too proud to ask for help when times are hard.