Feb. 17, 2022
Topic: How to Deal with a Cash Crunch
Guest: Dan Gordon & Donnie Shelton
In this episode we discuss:
How a cash emergency can be a death blow to a small company
Why the worst time to ask for money is when you need it
How it's common to see companies where there is no strategy around cash flow
Why banks are hesitant to give generous credit lines to pest control firms
How much credit you should have available
How often you should revisit your credit line with your bank
Things to consider if you routinely need your credit line to make payroll
Why your accounts receivable policies are critical
The power of cash flow forecasting and budgeting
Why days of sales in AR is an important indicator and how to calculate it
What to do if your cash crush is so bad you may go out of business
Resources mentioned:
PCO Bookkeepers article: Improve Cast Flow by Focusing on Receivables
PCO Bookkeepers article: The Power of Calculating Your Pest Control Company’s Cash Conversion Cycle
PCO Bookkeepers Operating Cost Study
PMP Industry Insiders Episode 32: How to Lead in a Crisis with Tim Brock
PCO Bookkeepers article: How to Negotiate Payment Terms with Pest Control Industry Suppliers
Advice: "At a minimum, you should have a month's worth of cash available as a credit line." —Dan Gordon
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