The Re-Start

The world is completely upside down. Some businesses are making PPE equipment to help save lives during this crisis. Others have had a significant amount of their workforce furloughed just to reduce overhead and to minimize the outflow of critically needed funds. No two situations are the same.

While every company has issues burning right now that need to be addressed upon the re-start, make sure you take the time to look at those basic elements of business such as people and products. These two elements will likely have a larger effect upon your long-term success.

For the first time in recorded history, people have had a full stop break. For many employees, they have had time to think about what they want in life and how they want to sequence their days. This is an excellent time to be an active listener and problem solver. Trying to get everyone back to the old way of normal will miss opportunities to grow. This is a great time to put together some problem-solving teams and get your employees to re-imagine their processes. Can they break up their work to accomplish more with a higher overall satisfaction level? For some, this may mean exercise time in the middle of the traditional workday. For others, it may mean an adjustment in working hours.

Product lines are also a critical area. While legacy thinking would have you questioning how quickly all product lines can be back up and in production, that may not be the best alternative. Before starting, take time to look at which product lines can be converted from raw material into cash the quickest. Some products will require more cost to re-start/build and be longer to convert to cash. Focusing on those product lines that can get cash flowing the quickest will be the most valuable.

No matter what, you will need your people and products to be completely aligned to get the cash flowing quickly and maximize liquidity. This means your sales and commercial teams need to be highly focused on those products that will convert to receivables the fastest. Make sure everyone understands the role of the cash cycle in your recovery.

Profit is nice, but cash flow is king right now.

Leave a Reply

Your email address will not be published.