How to Maintain Cash Flow Stability during Corona Pandemic

DicatNews - How to Maintain Cash Flow Stability during Corona Pandemic. Corona virus or COVID-19 is increasingly disturbing the public. Casualties continued to fall and the national economy was disrupted. Business actors also turn their minds so that their business continues to run. For example business owners, who continue to try to get through a crisis in order to continue to exist. One way they can do this during the COVID-19 pandemic is to always pay attention to the stability of cash flow.

Cash flow or known as cash flow is used to show the flow of income and expenditure in a predetermined period. Cash flow is the most important thing in financial management of a growing business. All strategies implemented and steps taken during this difficult time must be based on the company's cash flow. Then how do you maintain cash flow stability during the COVID-19 pandemic? The following tips are quoted from several sources:

1. Know and Save Production Costs

As business owners, we must know and calculate in advance how much the cost of producing our products. The cost of production itself is the accumulation of all costs we need in the process of producing a product or goods. Costs referred to as the purchase of raw materials, costs to pay production employees, operational costs of goods and other costs in accordance with the business that we run. 

Then try to save on production costs while still ensuring product quality. We can start by only buying raw material needs according to current needs, reducing overhead costs associated with the production process, you can also take care of production equipment to avoid your business buying new equipment.

2. Pressing Expense Costs

Once you know the production costs needed, we can limit and prioritize current business expenses. First, we have limited expenses by saving on the cost of producing our business products, then you must prioritize expenses by choosing which budget is considered to have a significant impact on current business and which budget should be reduced because it lacks or does not actually affect current business activities . 

3. Delay Inventory and Business Expansion

Adding inventory or expanding a business is indeed needed in increasing the competitiveness of your business. But to do both of these things a business needs to spend a lot of money. So that this will have an effect again on your business expenses.

Unless we believe that the addition of inventory and business expansion has an effect on the profit we will get during this corona pandemic, we can add to our inventory and business expansion while still paying attention to the profits obtained.

4. Promote to Increase Sales

We can offer promotions to increase sales because the first or second purchase from consumers does not necessarily produce a noticeable profit for our business. Give discounts to attract consumers to buy our products. Moreover, you already know how much production costs must be incurred so that the discounted price is given while maintaining financial stability.

We can also implement a bundling strategy by offering a package that combines several products. For example product A and product B, if purchased simultaneously it will be the price offered is cheaper than just buying product A only. By doing promotions like this, consumers are constantly encouraged to buy our products while we have carefully calculated them.

5. Prepare a Backup Plan

Businesses must have a backup plan especially when this corona pandemic has many unexpected things that might happen. For example, rising raw material costs or stunted shipments. To prepare for all the possibilities that will occur, arrange strategies from now on how our business will survive.

For example, we prepare a budget for certain emergencies or withhold credit so that we actually take it when the business really needs it.

6. Pay Attention and Create Cash Flow Reports Periodically

Continue to pay attention and make a cash flow statement periodically. The cash flow statement can predict our income and expenses in the next period so that we can plan the right business strategy and make faster decisions.

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