Cash Flow (Inflation/Finance)

March 19, 2024

Our March Round Table discussion centered around the pressing issues of cash flow and inflation.  One leader likened the fear of inflation’s potential impact to the anxiety of impending rain, emphasizing the importance of not succumbing to paralysis.

Below is a sample of the ideas and suggestions discussed at a few of our Round Tables.  See our website for more information on a Round Table near you! 

Don’t Get Paralyzed by Fear
One business leader has a friend in the cement business.  When it rains and he cannot work, he says it is not as bad as a day when they expect rain.  The threat of rain is worse than the rain itself.  It’s not how inflation and the economy are affecting you now, it’s the threat of where it might go that paralyzes people and it’s hard to move beyond that.

Pull Money out of Your Business
One Round Table member is a wealth management advisor.  He is encouraging business owners to have reserves and to pull money out of their businesses so that if the business goes down, they don’t personally go down with it.

Our Grand Rapids Round Table participants had the following suggestions to deal with difficulties around cash flow:

  • Ensure that the members of your organization understand the impact of inflation so they understand the company’s actions and can identify how they need to adjust their behaviors.
  • Focus on helping the members of your organization to be more creative in addressing inflation.
  • Focus more time on your company’s accounts receivable.
  • Develop creative payment options for your clients.
  • Consider initiating performance-based pay programs.
  • Adapt the services your company provides from a one-to-one focus to a group focus, which is more economical for your clients and more sustainable for you.
  • Spend more time assessing client needs so you can offer products and services that have a direct correlation to those needs.

Adjust to Budget
One Round Table member is in a service-based industry.  He now asks potential customers what their budget is, to help him refine what they can offer clients.  With inflation, customers become skittish with their pocketbooks.  See it, but do not be afraid of it.  If you don’t see it, you can’t make the adjustments needed.

Profile Your Clients
It is critical to profile clients, choosing those that can weather the current economic storm and pay you on time. Many companies cannot survive 120-day account receivables.  

Vertical Lines of Business
One business leader has three lines of seasonal businesses: Landscaping, snow removal, and mosquito control.  All employees are trained to work in all three lines of business, keeping staff working and cash flowing in.

Professionals in Your Corner
According to several business owners at the Kalamazoo Round Table, it is critical to have 3 professionals in your corner:

  1. Banker
  2. Insurance Agent
  3. Human Resource Professional

Your Employees May Have Financial Stress
As a leader, it’s good to understand that your employees may be dealing with personal cash flow issues as well, at least a high level of understanding.  Some of them have no issues, others are struggling and are stressed.

Faith Helps
When you seek God with all your heart in your business life, then you know that ultimately, he is running the company, and it is in good hands.

Upcoming Events
Please mark your calendar for our Grand Rapids Leadership Breakfast with Dr. Jeff Doolittle, owner of Organizational Talent Consulting on Friday, April 19th from 8:00 – 9:30 am at Grand Valley State University.

Please join us for our Kalamazoo Leadership Breakfast on Friday, May 17 from 8:00 – 9:30 am at the Kalamazoo Country Club.  Brian Long, an Economist from Grand Valley State University is our keynote speaker.