Tag Archives: cash

Death of the Doorknob

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I asked on Wednesday, what is likely never to return. Doorknobs will still have their place in private homes, but building designers may rethink surfaces that have to be continually sanitized. Post COVID-19, what will change about your business model?

  • The way you interface with customers.
  • The channels you use to market to customers.
  • The texture in your customer relationship.
  • Your value promise.
  • The price your customer is willing to pay for your value promise.
  • The resources you need to fulfill your value promise.
  • Your cost structure to pay for those resources.

Death of take-out
“I appreciate you as a customer, and I am glad you ordered a meal in my restaurant. No, you may not come inside, not even to pick up your food. We do not offer take-out, we only offer drive-thru.” Long ago, restaurants realized the disparity between the capacity output of the kitchen and the seating capacity in the dining room. Some current restaurants have dedicated parking spaces for take-out, those will disappear. New restaurant construction will consider ingress to drive-thru lanes to expedite meal throughput. The capacity of the restaurant will now be on the output of the kitchen.

Death of cash
This may also be the death of the swipe or chip credit card. NFC (near field communication) terminals allow touch-less transactions at the checkout counter. The checkout counter will no longer have a person standing behind it.

Death of the cashier
We all hate those self-serve checkout counters. The bar code doesn’t read because it’s frozen over or smudged with dirt. Doesn’t matter. Any transaction not requiring a human (or fewer humans) will be performed by a computer.

Death of the doorknob
Keyless entry, building security will all go touch-less. Your smartphone will gain your access, with a code connected to your identity.

Most of this technology already exists. Post COVID-19, its adoption will be accelerated. Think long and hard about your business model.

These permanent adaptations will seem clumsy at first, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

This is Not Nuclear Winter

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As a business owner, three things to monitor.

  • Cash
  • Revenue vs Expense
  • Balance Sheet

Cash
Cash is king. And, only cash is cash. Accounts receivable isn’t cash, inventory is not cash, only cash is cash. You are going to need it. Preserve cash, tap your lines of credit, apply for government backed loans and grants.

Revenue vs Expense
Your monthly cash flow statement might need to be a weekly cash flow statement. Most accounting systems have embedded cash flow statements, but they don’t look forward very well. Try this simple one.

  • Cash Balance
  • Anticipated cash during the period (month, week) from revenue sources and accounts receivable.
  • Anticipated expenses during the period (month, week) including payroll, rent and any other necessary expense.
  • What’s left? If it’s positive, that’s good. If it’s negative, that is your burn rate.

Your burn rate will eat your cash, so how much do you have in cash reserves to cover? Without modification in payroll, paying your rent, paying your vendors, how long can you last?

Balance Sheet
Most businesses can get their expenses underneath their revenue. It’s painful, but has to be done. It’s not the profit/loss that kills most companies, it’s the balance sheet. It is mortgages, institutional debt (term loans) and covenants that go with. Having other assets, such as crypto in Secure Cryptocurrency UK or other investments, can help diversify and provide more flexibility during tough times. Make sure you know your banker, high quality communication early will help. Your bank will usually put you out of business before your landlord or your vendors.

Make sure you have your survival plan in place. If you want your kids to take over your business someday and secure their future, it is advised that you work with experts in financial planning for future generations.