Small Business in Gaborone? 8 Tips for Surviving a Cash-Flow Crisis

cash flow crisis

In Botswana, the extended lockdown and economic recession are adding to the woes of cash-strapped small businesses in Gaborone – most of which are struggling to survive.

In times like this, cash-flow management is key.

Here are eight best-practice tips that can help you generate the funds you need to survive a cash-flow crisis.

1. Review the business fundamentals

Before you’re able to make informed decisions, know exactly how much money is coming in and going out.

Then you can gauge whether the business is solvent enough to meet current and future obligations.

When there aren’t sufficient funds to cover fixed expenses, a proactive approach is required.

This may entail making tough decisions.

2. Cut back on expenses

Evaluate how much you’re spending on services like electricity, telephones, data, Wi-Fi and business insurance.

Cut back or look for cheaper service providers.

If office rental rates are high, consider downgrading to smaller premises, using coworking facilities or working from home.

Employee perks, like paid parking and meals, must go for the foreseeable future.

3. Outsource where possible

Consider outsourcing the bulk of business processes like manufacturing, sales and marketing, transport, warehousing.

In-house operations are usually more expensive and labour-intensive.

4. Liquidate non-essential assets

Selling or hiring out redundant or underutilised machinery and equipment is an effective way to generate income.

Leveraging office or commercial property, company vehicles and other assets held in the business can help sort out cash flow.

5. Find ways to trim the wage bill

Retrenching staff is a last resort but there are ways to reduce the wage bill.

Impose salary cuts, shorten work hours and request senior management to take unpaid leave.

These practical solutions save jobs and improve liquidity.

6. Monetise the inventory

Excess inventory is a red flag.

It ties up money that could be utilised elsewhere in the business. It also takes up storage space.

Get rid of old stock even if it means selling it at a discounted rate.

7. Negotiate with suppliers

Suppliers are the lifeblood of a business.

They’re also one of the largest items under accounts payable.

During a cash-crunch, renegotiate the payment terms with a discounted rate or longer payment period as the end goal.

8. Consider alternate financing options

When you’ve exhausted your existing line of credit and you don’t qualify for a bank loan, consider alternate financing options.

Fortunately, there is a selection of short-term small business loans in Botswana to help you through the economic downturn.

Finding the right option depends on a number of things, including repayment history and credit score.

Getting a loan against assets in Gaborone from lamna Botswana

If you’re a small business in Gaborone and you need quick access to cash, lamna Botswana can help.

At lamna Botswana, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or valuable works of art.

For more information about using an asset to secure a short-term loan, contact us on 71 388 088 or simply complete and submit our online application form.

Complete our Online Application Form