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  • Writer's pictureCherie Larson

Building a Cash Reserve in a Challenging Season

Having a cash reserve makes a lot of business decisions easier and provides freedom to make choices. During a downturn in business, cash in the bank can be a safety net to get you through the rough waters – and often lead to greater success down the road.

Where do you start when cash is low and expenses are high, or how do you preserve the cash you have? We’ve got some tips to help you out:


Sell more items that you can get paid for immediately.

  • Can you collect a deposit, sell gift cards or sell items related to what you do but normally aren’t sold?

  • Can you negotiate shorter terms on things that are invoiced?

Collect money owed to you.

  • Often, small business owners have a personal relationship with their customers and are afraid to ask their customers to make a payment. Your customers generally don’t intend to not pay – they are either so busy focusing on their business that they forgot OR they’re having cash flow issues of their own.

  • Offer a payment plan that calls for a portion of the invoice each week. Again, your customers are generally not trying to avoid paying you, they just don’t or can’t. Breaking it into small pieces can make it manageable for them.

  • If you have an admin or bookkeeper, have them send out the first reminder. This takes the personal side out of things, and you can always follow up later if the issue continues.

  • Don’t continue to extend credit to customers who don’t pay.

Sell things you no longer need or use.

  • Evaluate old computer equipment, desks, cell phones and more. Even a little bit of money is better than stuff just sitting around collecting dust.


  • Payroll, loans, taxes, rent and utilities generally must be paid – at least in part. Figure out your monthly expenses in these areas, and set aside this money immediately so you can continue to meet these important obligations.

  • If possible, put the money for these into a separate account so you’re not tempted to spend it on other things. Pull it out only to pay those bills.


  • What if you waited another day/week/month to purchase?

  • Do you really need it?

  • If you need it, can you buy a smaller quantity? Even if the price per unit is more, preserving cash is key - buy less!

  • Can you buy it used?

  • Are you using a subscription that you’re paying for? If not, cancel immediately!

As with any change, implementation is hard. Focus on making a change just for today or this week. These changes will not be forever…or you may decide they are so beneficial that you want to implement them in your business long term!

We’re here to help. Schedule an introductory call to see how we can support you to make a difference in your cash flow.


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