Practical tips tech companies can take to maintain financial strength and stability
These are unprecedented times. What do you do when faced with the world grinding to a halt?
While CEOs and CFOs scramble to assess risks and take action to mitigate against short term scenarios, it is worth pointing out that planning for the long term will help keep you strong and stable.
You see when you plan for the long term; you keep your options open. Building a war chest helps you to deal with changes in the business environment.
Here are some practical steps you can take:
1. Be proactive in speaking to advisors about your options
A specialist debt advisor knows which funds to approach to support your transactions. Better still can get options on the table to you fast.
2. Review your cash runway
Make sure your company doesn’t outrun its source of cash. Investigate options for temporary finance. Know that debt finance buys you time and gives you a protective ‘financial’ cushion so that you can get back on track.
3. Review your working capital requirements
Cash is king. Strong working capital helps you to stay resilient when faced with unforeseen circumstances such as a sudden decrease in sales revenues.
4. Review your business and resources
Determine what cash you need to operate in a complex environment. Also, make sure you have the funding you need to hit the ground running when the world returns to normality.
5. Look for opportunities to maintain and control your business
There’s no time like the present to remind yourself that business growth isn’t always linear. Make sure you have the funding you need to weather inflection points and make strategic pivots where necessary.
To sum up
The best advice we can give CEOs and CFOs of tech companies is to ready a war chest to help you through these uncertain times.
A specialist debt advisor can run through your options. Also, source the most appropriate lending partners and structure transactions so that you can confidently take steps to keep your company financially strong and stable.
As a result of your planning, you’ll give yourself options for:
- Extending your cash runway
- Keeping working capital flowing
- Investing in business and resources so that you can hit the ground running when the market returns to normal
- Having the financial strength to weather inflection points
I’m ready. Are you?