Analyze the stats: Save cash through a detailed look at your books
In addition to raising supplemental capital, make sure you’re seeking out all the places you can save cash in your business. An operational overview can help you see any duplications or inefficiencies that can be addressed. Maybe you need to consider deferring certain compensatory events, such as raises, bonuses, and other added compensation, to conserve cash in the short term.
Public companies might want to consider cutting their dividend rate and/or deferring any stock buyback programs in place. While these policy changes can have some negative consequences, many companies are considering such strategies as viable alternatives to add cash to their bottom lines – especially if their record up to this point has been favorable.
Are you considering any upcoming capital expenditures? If you were planning on building or buying additional facilities, or making a large investment in inventory or equipment, you might want to reconsider. Based on the current environment, does your company still have a need for that investment? Is there a way to scale back or postpone the purchase?
Evaluating your current balance sheet is another way to preserve cash. There might be parts of the business that are not producing the value they once were, or facilities that no longer fit your current level of production. Are these assets key to what you’re currently doing and where business is heading? If not, consider unloading them to free up extra resources.
