In Advertising, Marketing

Keep the Cash and Communication Flowing

All of us in business know the adage, “Cash is King.” It means that a healthy business must not only close sales, complete work, and have strong receivables, it must have cash to pay its people and cover operational expenses. Otherwise the company won’t be able to stay in business.

Similarly, in your business relationships you need to keep the communication flowing both to your customers and to your team to let them know what’s going on with you and to hear back from them.

In this blog, I’d like to consider how we can remain healthy by tending our cash and our communications.

Let Cash Flow to Everyone

Especially at this time when revenue projections for every business are uncertain it’s critically important to have a healthy cash position. Every day you extend the availability of cash you create the opportunity to do the same tomorrow. Do whatever you can to keep the cash flowing as long as you can. Notice I didn’t say keep the cash as long as you can. But keep it flowing.

Some may think that in a precarious time the smart thing to do is to just cut staff, hoard funds, and protect the financial interest of the shareholders or individual owners of the business above all else.  This may be conventional wisdom, but it is not the smart move at this moment.

It is true that when changes in the market result in a significant loss of revenue for your firm, and it is uncertain how quickly you will be able to replenish that revenue, the best thing for all involved is to take immediate action to balance what is going out with what is coming in. “Spend less than is coming in.” And if the conditions are sudden and severe enough, this will inevitably mean reduction in headcount.

Manner and Tone Communicates

But what businesses often miss is the importance of the “how.” This first business best-practice of controlling costs needs to be connected with another, one that is as old as the song many of us grew up singing around the campfire: Make new friends and keep the old, one is silver and the other gold.

It is critical that you honor your team members by working to provide them with the best possible way forward. When you do this, there’s no telling the good that can result.

For example, there could be a turnaround that allows you to hire them back within a matter of months. And because they were treated with respect, they will remain loyal to the firm and come back with deepened commitment. Everyone has “discretionary” energy related to their job. People can just get by or they can choose to really invest themselves. That’s the energy you want returning to the company—people who are going to go the extra mile to work through problems that may have resulted because of the downturn. This approach equips you with an engaged workforce that is motivated knowing that their commitment will be matched by the company. There is a true partnership where there is in fact “something in it for them.”

Other positive options are that you may not be able to hire them back but when they go to other firms, because they have been treated well, they recommend you to their new firm or better yet, source you. And if they begin their own venture, they may look to partner with you and create a win together scenario that achieves something that would never have happened unless you had traveled through the crisis with your relationship intact.

Abundantly Communicate if Scarcity Comes

To keep these relationships in good order, it is so important to keep communicating. Regularly. Don’t let them feel like the sword of Damocles is hanging over their heads and it might drop at any moment. Be transparent with your team. Let them know what reality is. Give them whatever options you can for them to have influence in the situation, and if eventually it does mean lay-offs, find some way of recognizing their contribution and thanking them. They may not be able to receive it at that moment but later they will remember those actions.

The same is true of your vendor partners. If because of the downturn you have outstanding bills that you’re having difficulty paying on time, rather than trying to hide from your creditors, run toward them. Communicate. Make this your principal. Be forthright with them. Often you will find they will offer you more favorable terms or even discounts on what you owe them if you pay promptly.

With those who demand that you meet payment terms as if there were no crisis, put them on the top of your list for payment, communicate where they are in line on your list, clean the payment up, and then walk away. They were never really partners to begin with if in this crisis they will not work with you.

The Banker that Kept the Cash Flowing and the Company Afloat

We’ve been in business at MOVE Communications for over 35 years. In that period of time because of market and technology changes we’ve had five periods when we had to essentially reboot the business. We tried the best we could to keep our team intact but, in each case, we eventually had lay-offs. On two of these occasions we actually incurred some significant debt in trying to keep everyone on board. Not a good idea.

But what we did right was honor our relationships with our team, with our supplier partners, with the bank, and with our customers. And because of that we benefited from their goodwill. It was absolutely critical in helping us to go forward.

Here’s one stand-out moment. At one of these downturns we lost a significant anchor client. We had an outstanding balance on our line of credit with the bank and were out of formula against receivables to pay this back. Plus, with the loss of this client we would most likely not see the same level of revenue coming in for quite a while.

Because we communicated with our bank loan officer and let him know our position in detail, he developed a plan with us and then advocated on our behalf at a time when the bank was skittish about outstanding balances. When he presented our go-forward plan to the loan committee he communicated this: “I think there are some intangibles here.” In other words, there’s something about this team that you can believe in. They’ll keep their word and they will work very hard to see this turn around. You should take the risk. And because of his word, they did. And because they did, we’re in business today. They helped us keep our cash flowing.

So, as you think about how to respond to this present significant downturn in the economy, whether you’re a small business or a major global corporation, don’t just go to the conventional business wisdom of cutting everything in sight. This is a special time. It needs a special intervention. Do everything you can to support your team. Find ways to keep some cash flowing in their direction. If it’s advance payment on vacation time or reducing their hours to just a quarter time, find ways to keep those relationships strong. And communicate along the way.

Also make certain that you understand both State Unemployment Insurance guidelines and the Pandemic Unemployment Assistance (PUA). Employees with sufficient hours can receive both State Unemployment Insurance benefits and federal benefits under PUA. 1099 and business owners cannot receive State Unemployment benefits, but they can receive federal PUA which provides $600/week.1 Check your State for details.2

If you’re a big firm, and you happen to be reading this—take a challenge from a small firm leader. As hard as it might be, don’t just focus on shareholder value. Communicate with Wall Street. Inform them they’re going to have to wait like the rest of us, but that you are going to create a climate where you will protect their value while at the same time demonstrate your loyalty to your workforce. Inspire your shareholders—to be patient and be co-creators in the future with your firm by not selling their stock and taking what cash they can get. “Keep your cash flowing through the company. You’ll get a better return.”

The Parable of Cashflow

Let me end with this story. It’s a parable Jesus told about a successful landowner. He did so well for himself and had such an excess that he had to build more barns to contain it all. When he’d finished, he contented himself by saying, “My soul, you have everything you need. Rest and be happy.” God’s response in the story? “How foolish you are. For this very night your life will be required of you.”3

The condition that made this owner foolish was not that he was wealthy or that there was an abundance. It was that his attitude was one of keeping the cash to himself rather than keeping some of the cash flowing, so that others might benefit as well.

As business leaders, let us do everything we can to act with courage and foresight on behalf of all those involved in our value chain. Let’s not put our security in keeping the cash. But trust in divine providence that as we steward our cash, more cash will come at just the right time, and inevitably greater abundance will flow to us and to many others because we decided to…

Keep the cash and the communication flowing.

N.B.: We can’t directly help with your cashflow, but we can help with the communication flow. Contact us to assist you in creating the conversation. You’ll get a good return.



1 – Information on PUA
2 – Unemployment Insurance Benefits and PUA details in Michigan,9753,7-406-98158-523450–,00.html
3 – Parable of the Rich Man



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