A crisis like the current coronavirus pandemic can place many types of strain on a business. One of the most damaging disruptions occurs when a business’s cash flow is halted or reduced. If your business is facing cash flow gaps, the following tips can help.

Eliminate Expenses

The first thing you should do when facing cash problems is to take a cold, hard look at your business’s expenses. There may be many ways you can reduce them. For example, if your office isn’t being used because workers are telecommuting, make sure all of the lights are off and the thermostat is set at an appropriate temperature. That can reduce utility bills.

Negotiate Constantly

At The Conversation, accounting expert Matthäus Tekathen writes that negotiating is critical for surviving cash flow gaps. Suppliers and lenders may be amenable to arrangements like deferred payments or renegotiated terms.

Work to Gather Payments

Ensuring your customers pay on time is vital to restoring cash flow. You can structure agreements with customers in a way that incentivizes them to do so. For example, enforcing a penalty for late payments can make customers more likely to pay on time, as can positive incentives for prompt payments.

Avoid Dangerous Financial Behaviors

A cash flow problem can seem extremely urgent, which leads some business owners to seek financing wherever they can. However, certain options may provide short-term relief but cause long-term harm. For instance, be wary of credit cards with high interest rates. These can offer a quick fix at the cost of crushing monthly payments down the road.

Another danger to avoid is dipping into your personal retirement account. Doing so now can make it very difficult to catch back up as you near retirement. Besides, it’s important to keep your personal and business finances separate. 

No matter the situation, LMC Alternative Business Capital has many different funding options that can help your business thrive financially. If you’d like to learn more, please get in touch!