Navigating a Liquidity Crisis: Strategies for Survival 😱
Hey there! In this Loom, I want to address the pressing issue of a liquidity crisis that many businesses, including the ones I work with, are facing. With less than six months of cash on hand, panic sets in, making it difficult to focus on anything else. But fear not! I've got some practical tips to help you navigate through this challenging time. First, communication is key. Embrace the doomsday mindset and have open conversations with your co-founder, advisors, and investors. Surround yourself with people who thrive in such situations. Second, seek expertise. Reach out to professionals on LinkedIn who can offer valuable insights. You'll be surprised by the number of people with good brains out there! Third, don't underestimate the importance of finance systems. Even if you have minimal funds, accurate cash flow management is crucial. Take your company's finances seriously. And finally, focus on revenue generation. Selling your product is often easier than selling investment. So, let's dive in and explore these strategies together. Action requested: Implement these tips and share your experiences in the comments!
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Nearly stage fundraising so it won't be a surprise for anybody to understand that there's a huge liquidity crisis. The businesses that I generally work with have less than six months cash on hand.
Often I'm speaking to entrepreneurs. Who have less than six weeks. What do you actually do about that? You know you're in a pure state of panic.
It's engulfing all of your productive thoughts. How can you possibly consider signing on a new a new client. Point one communication.
Embrace the doomsday mindset. Talk openly with your co-founder, with your advisors, with your investors, and get comfortable in those scenarios.
You know, surround yourself with people who thrive in those situations. I know I'm one. I'm one of them. Two, expertise.
You know, reach out to people. There's lots of people on LinkedIn who've got an opinion. Reach out to them, talk to them.
You'd be surprised at how many people have got good brains. Three, finance systems. Just because you've only got 50 pence in the bank, or 1 euro or 1 dollar.
Don't underestimate the importance of accurate cash flow management. You know, take your company's finances seriously, even if it seems like there's no finance to manage.
4. Revenue generation. Focus on making money. It's a lot easier to sell a product than it is to sell investment.
If you need 5k, 10k, 20k, you can go out and get that from customers. Even if you've got a hacked together version.
So don't take your focus off revenue generation even for a second. And yes, none of this will change your business overnight, but it'll certainly put you in a better position than you are today because you'll have your head built.
And your eyes open for what's going on.
Transcript
Show Transcript
Nearly stage fundraising so it won't be a surprise for anybody to understand that there's a huge liquidity crisis. The businesses that I generally work with have less than six months cash on hand.
Often I'm speaking to entrepreneurs. Who have less than six weeks. What do you actually do about that? You know you're in a pure state of panic.
It's engulfing all of your productive thoughts. How can you possibly consider signing on a new a new client. Point one communication.
Embrace the doomsday mindset. Talk openly with your co-founder, with your advisors, with your investors, and get comfortable in those scenarios.
You know, surround yourself with people who thrive in those situations. I know I'm one. I'm one of them. Two, expertise.
You know, reach out to people. There's lots of people on LinkedIn who've got an opinion. Reach out to them, talk to them.
You'd be surprised at how many people have got good brains. Three, finance systems. Just because you've only got 50 pence in the bank, or 1 euro or 1 dollar.
Don't underestimate the importance of accurate cash flow management. You know, take your company's finances seriously, even if it seems like there's no finance to manage.
4. Revenue generation. Focus on making money. It's a lot easier to sell a product than it is to sell investment.
If you need 5k, 10k, 20k, you can go out and get that from customers. Even if you've got a hacked together version.
So don't take your focus off revenue generation even for a second. And yes, none of this will change your business overnight, but it'll certainly put you in a better position than you are today because you'll have your head built.
And your eyes open for what's going on.
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