Businesses with dependence on the Oil & Gas sector will continue to face a bumpy ride for the short and medium term – that’s no surprise. Business owners have far less control (if any) over revenue sources right now, but still have control over costs. The need to cut fat and get lean is obvious, but determining what’s fat, meat or bone, isn’t so easy. Here are some places to look to improve your cash position or cash management;
- Suppliers: Look for longer payment terms and ask for discounts. You don’t know until you ask.
- Clients: Offer incentives for early payment or charge interest for longer terms of payment.
- Staff: Job sharing, cutting perks, rolling back hours and contracting out are all ways to find money.
- Re-Financing: Borrow against assets and property to generate capital. Look for non-demand debt (ie: leases and non bank financing).
- Sell non-essential assets. Use the internet to post your gear as markets are becoming international. This can help to pay urgent debt or increase cash.
Often a little of each is what makes the difference. Being pro-active and open with your team is paramount and they can often be a source of encouragement and creative measures if put to the task. Coming out of this cycle and into the next one (growth) you will find your business is a much better position to take advantage of new opportunities.