If you are already faced with a cash gap, you should not panic, but make clear and quick decisions to regain control of the situation. You can use one or more methods to reduce the cash gap.
1. Eliminate low-priority payments, push back other payments
First, you need to determine which of your obligations can be postponed to a later date. This could be rent, payment for some supplies that are not critical. Try to agree with counterparties on a deferment in order to focus on the most important payments – employee salaries, taxes and priority supplies.
If you are unable to agree on a direct deferment, you country email list can try to split the payments. For example, you need to pay 1 million rubles. You can ask to split this amount into 4 parts and pay the bill weekly over the course of a month.
2. Stimulate sales
Increasing sales is one of the most effective ways to quickly replenish cash reserves in the cash register. For example, if there are a lot of goods in the warehouse, and money is needed here and now, you can try to introduce discounts on services, products, promotions for customers to increase the number of orders.
You can also offer additional services or products to your a company’s internal and external communications customers. This will allow you to quickly get more money and reduce your debt level and the gap between your expenses and income.
3. Use your own money
In the most critical moments, an entrepreneur can use his own savings that are not related to the business.
4. Take out a short-term loan
The riskiest, but at the same time the simplest and most common option. If your own funds are insufficient, consider the option of obtaining a short-term loan through a bank. This type of financing is suitable for eliminating cash flow gaps.
You can borrow money at a high interest rate, but for a trust review short period: a week or a month. You need to return the entire amount quickly – as soon as money comes in from debtors or sales revenue increases.
In this case, it is important to take into account the conditions: interest rates and repayment terms. Remember that taking a short-term loan at a high interest rate is a very risky method. It often happens that companies only worsen the situation with the debt burden and can no longer conduct business and sell their goods and services.