Tag Archives: Work Flow

How Do You Manage Cash Flow in a Recovery? Six Suggestions

Situation: Markets are currently down but everyone is hoping for a recovery. As business improves a company needs to manage cash flow to support growth. How do you manage cash flow in a recovery?

Advice from the CEOs:

  • This is a common challenge following a down period. Companies have reduced personnel and used up cash reserves to survive. As demand resumes it may be necessary to add resources as you increase production. It’s important not to let accounts payable get ahead of receivables.
  • Ask customers for deposits on orders – giving you up-front cash. Give priority to those who respond positively.
  • Redesign the work-flow. Add independent contractors on a project basis. This requires good cost estimates and well-defined deliverables.
  • Work with your bank and Line of Credit.  An LOC should cover 1-3 months of operation. Ask for a lot, and shop different banks for favorable lines and rates. An LOC is a short-term obligation whereas debt may be long term. Watch your debt covenants for restrictions on obligations to assure that you stay in compliance. LOCs are frequently Prime plus 1-2%.
  • If you have a broker, see what rates they will offer on a business credit line to keep your brokerage business.
  • The best alternative is to plan ahead and develop a strong relationship with your banker. This centers on a reliable credit history, so that when need arises, the banker will help you based on your past performance and the confidence that they have developed in you and your operation.

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How Do You Facilitate a Move to a New Space? Five Recommendations

Situation: A company has taken advantage of favorable lease rates to secure a larger space. How can they minimize work flow disruption during the move? How do you facilitate a move to a new space?

Advice from the CEOs:

  • Plan the move in detail: electrical, intranet and telephone needs; office space and facilities; design or production space and facilities. If you can’t move everything over a short period of time – like a 3-day weekend – consider moving in steps, a series of discrete moves over time, each with its own requirements and timetable.
  • If you carry inventory, pre-build inventory to see you through critical steps of the move. If you have a major customer with strict delivery deadlines, try to negotiate a delivery window during which you can conduct the move. Determine if there is seasonality to order delivery that makes a particular time of year more convenient to move critical operations. Custom work will require special planning.
  • If you plan to upgrade equipment, consider purchasing, installing and operating the new equipment in the new location instead of your existing location.
  • If you will be leasing the new facilities and possibly be even if you are purchasing the facility, ask the new lessor or seller to provide cash to: (1) finance delayed shipments at a price discount and (2) cover expenses of the move and outfitting the new location to your needs.
  • Consider converting to a wireless intranet and telephone system to avoid the expense of wiring the new facility. Look at plug and go options.

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Great Deal on a New Space . . . Now We Must Move! Five Recommendations

Situation: The Company has taken advantage of favorable lease rates to secure a larger space. How can they minimize work flow disruption during the move?

Advice from the CEOs:

  • Plan the move in detail: electrical, intranet and telephone needs; office space and facilities; design or production space and facilities.
    • If you can’t move everything over a short period of time – a 3-day weekend – consider moving in steps – a series of discrete moves over time, each with its own requirements and timetable.
  • If you carry inventory, pre-build inventory to see you through critical steps of the move.
    • If you have a major customer with strict delivery deadlines, try to negotiate a delivery window during which you can conduct the move.
    • Determine if there is seasonality to order delivery that makes a particular time of year more convenient to move critical operations.
    • Custom work will require special planning.
  • If you plan to upgrade equipment, consider purchasing, installing and operating the new equipment in the new location instead of your existing location.
  • If you will be leasing the new facilities – maybe even if you are purchasing – ask the new lesser or seller to provide cash to:
    • Finance delayed shipments at a price discount,
    • Cover expenses of the move and outfitting the new location to your needs.
  • Consider converting to a wireless intranet and telephone system to avoid the expense of wiring the new facility.
    • Look at plug and go options.

Key Words: Planning, Location, Work Flow, Inventory, Technology, Customer Service, Logistics  [like]