Introduction to Meeting Topic:
Preserve Your Cash In a Downturn By Raelene Rees
As the old saying goes, ‘Cash is King’. That phrase is never more relevant than in an economic downturn. Thinking outside the square when it comes to protecting your available cash will be one of the keys to coming through the next several months unscathed OR better off than you are now! Read the article below and identify 1 or 2 strategies you’ll implement this week to help yourself.
Preserve Your Cash In a Downturn By Raelene Rees
In the current financial climate, it is important to free up as much cash (accountants call it ‘working capital’) as possible. I’m sure you know the old saying ‘cash is king’? As someone who has worked with countless small businesses, I’ve seen it all! And here are a few of my thoughts around how to maximise your available cash:
- Sell off any excess assets, whether business or private. If you’re not using it, and aren’t likely to, this will free up not only cash but space as well. Also considering leasing assets, that way you are up-to-date with the latest technology and not stuck with out-of-date equipment ie: photocopiers and computers.
- Align yourself with another complementary business to share overheads, space, client databases – ie: hairdresser & beautician; mortgage broker & lawyer. This would have the added bonus of increasing sales as well as reducing costs, a double win!
- Sharing overheads is a great way to reduce costs – have you got excess space you can sublet?
- Review all overheads, as there are bound to be some costs that can be eliminated. ‘Subscriptions’ is generally a good one to review, as you may find apps or software that you no longer use.
- Insurance premiums should be reviewed annually. Having insurance is good business practice; however, premiums can be reduced by increasing your stand-down period and also the amount of your excess. Discuss this with your advisor, and ensure the cover you’re paying for is still relevant to your business.
- Keep on top of your Accounts Receivable! Don’t become a ‘bank’ for your customers. Review your credit policy – perhaps cash on delivery or 7 day invoicing works better for your business than 20th of month following. Can you ask your clients for deposits in advance?
- Monitor your stock. Carrying too much stock means too much cash is tied up and could create the opportunity for some stock to become obsolete/out of date. If your suppliers can give you the product you require quickly, perhaps this is a better option to lower your stock levels. Be mindful though that you may lose out on quantity discounts and reduce your buying power.
- Automate more in your business. Xero is very powerful accounting software with hundreds of add-on applications. This could reduce many excel spreadsheets you are currently using and also means all relevant staff in your business can easily access the data they need.
- Investigate available assistance from Government – national and local, as well as local enterprise initiatives to help you with your business. Are you taking advantage of all that is on offer?
- Keep in contact with your bank and IRD. IRD will accept a payment arrangement as long as debt is repaid within 12 to 24 months and you are current with your ongoing taxation commitments. They will charge interest, but their debt isn’t secured which gives you an opportunity to get more secured debt with your bank. Consider other avenues of borrowing ie: Prospa. While not a mainstream bank, they will charge you higher interest, but can offer you short-term borrowing to see you through a rough patch.
At all times do keep in contact with your Accountant as they are there to HELP you, and you are not alone – lots of clients are currently looking at all these options as they navigate the economic downturn.
Raelene Rees is a Chartered Accountant based in Christchurch. You can find out more about her here: https://www.reesaccounting.co.nz/Who-We-Are/
Next Meeting Topic
Introduction to Meeting Topic:
In this week’s article, Teresa Ma’aelopa shares her take on what it takes to create marketing communications that actually get your message across! Read the article, then prepare to discuss which of these 8 points you may need a bit more work on in YOUR business!
8 Characteristics of Effective Marketing By Teresa Ma’aelopa
Creating effective marketing communications is challenging as it’s not an exact science.
Whether you are communicating with customers through email marketing, social media, marketing campaigns or content marketing like blog posts, considering the following characteristics can make you more effective.
The first step of this process is to identify your BEST customers (your target audience), and the second step is making sure that you are relevant to this customer group. Understand your customer and what is important to them, then you can target your marketing message. If there is nothing in it for your customer, then the message is not relevant for them.
- Have a single-minded message
The human brain is comprehending multiple messages every moment so will often discard complicated messages. A successful communication will present one message backed by information that needs to be communicated to give your offer credibility.
- Repeat, repeat and repeat again
Repetition breeds familiarity and will influence a preference when it comes time to purchase. Studies on frequency suggest between 10-20 exposures will reach the maximum familiarity necessary. But be careful of over-exposure, as anything over that and it could have a negative effect on your brand.
People have a deep-seated need for connection. We want to know that we are not the only ones that have experienced the good and bad times. By making your brand and product/service relatable you are tapping into that need for connection. Be empathetic, share experiences and become a part of people’s stories.
Being real in your communications helps to build trust with your customers. So, write about what’s important to you, and what your values are. By sharing a piece of yourself with customers it will help them to understand who you are.
It is important to make your message memorable. The human brain doesn’t remember facts and figures as well as it remembers stories. If you can tell a story about your product or service, it is much more likely to be remembered than the specific technical features.
Story telling starts with considering the benefits of your product from your customer’s perspective and understanding your customer and their motivations.
- The best marketing doesn’t feel like marketing
Being happy and having fun are two emotions that people strive to feel regularly. Creating entertaining communications will tap into these emotions and will also mean that the reader doesn’t realise they are being marketed to.
This is why social media and digital marketing is popular. And why YouTube is now the most popular channel in NZ (NZ on Air Where Are the Audiences survey).
- Create a deep connection through emotion
People rely more on emotions than on information to make decisions. The final choice is likely to be made based on how the product or service makes them feel.
The basic emotions that marketers tap into are happiness, sadness, anger or fear. Using emotive language in an appropriate way helps your customers to relate to you and your business. It can create a deep connection between you and your audience.
The key to implementing these 8 characteristics successfully is to plan your communications across all your marketing channels. It’s not possible to include all of these characteristics in a single message so planning will ensure that you include them over a range of multiple communications. And make sure you continue to refine your messages and communications by reviewing what has been successful.
To learn about how Teresa helps her clients, you can find her here: https://maxmarketing.co.nz/our-team/teresa-maaelopa/
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