Cash is King when Furlough Finishes

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A certificate to hang on the wall telling the world you are “educated” in business studies certainly doesn’t cut much mustard if you’re struggling to get the cash to pay your team at the end of the month. You are going to need to have in place a proper Cash-Gap plan, perhaps one of the hardest things to deliver in practice when your back is against the wall. An unemotional look at projected income levels, payment terms, fixed and variable costs – with clear decisions around the impacts of cuts and changes – has to take place. And well before pay day.

And how are you going to do that?

Cathy, one of my hospitality clients, has had one heck of a hard time of things this past year. Coming out of ‘furlough’ is worrying her stiff because the buffer of Government help will shortly not be available and the pressure on cash will intensity. On re-opening she expects a ‘bounce’ in income – but the winter months are not far away, and the spring and summer are her main earning periods. Will the bounce be big enough to see her through? It’s far too important a question to leave to chance. Her partner is equally committed to the business but, like us all, has projects he wants done and completed. But what’s important? What can be left? What can’t be? How much more sacrifice has to be made to weather the easing of the storm? The first thing we brainstormed was a matrix of essentials, nice-to-haves and ‘can waits’. It was the last box that caused us most problems.

As coach, I could step back a bit, but not too far. I am very committed to their success too. I had to avoid getting sucked into the pure emotions of it all and, more importantly, I had to create an inner space so they could start to change their own mindsets. Not tell them what to do – that never works in coaching. But allow a fresh vision to appear, one that they had not thought of before. Whereas a consultant will tell you the time after he has first asked you what it is, a coach always has to let the process of discovery for ‘oneself’ unfold. Sure, I could have told Cathy what I thought was the best thing to do and left it there. But had I done that, Cathy and her partner would have taken far longer to ‘own’ the solutions; they had to see them for themselves. My job, by asking great questions, was to let them discover the obvious next steps and to give them the time and space to do it.

One of the great ‘space making interventions’ is to do a bit of visioning work together. It’s about getting the headspace right. It about ‘dreaming’ a bit – after all, if we don’t have dreams, we are not going to realise much more than the mundane.

We don’t have to wait until the business is in a tight spot before ‘envisioning’, as I call it. We can practice it any time we like. Just close your eyes and imagine what you want the business to look like in 12 months from now, 18 months, 24 months from now. Where are you now in the business? What are you doing? How well is it all going? Let your dreams unfold. Regrettably, you can’t tuck the dreams away and leave it there. You have to come back to face the hard reality. But as Cathy found, the envisioning work actually helped her see more clearly what she had to do to get through the immediate problems. The decisions, although still hard, somehow got a little easier.
Cash is always the awakener. Indeed, in business it is King!

If you haven’t already started working on a cash-gap plan for when furlough finishes, you should start just after finishing reading this. It may sound a touch odd that we have to “weather the recovery”, not just the storm. But that is just how it is. No dreams allowed during this crucial decision-making time of the business. And when the cash-gap plan is in place, the dreams will be far sweeter.

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