In a crisis, don’t cut costs at all costs. See how financial leaders keep spending in check without compromising long-term growth in our playbook.
Kyle is the CFO of Ralston, having previously held the same role at Feeld and Jetstack. Kyle is an experienced founder with a demonstrated history of working in the management consulting industry. Ralston delivers flexible finance support for startups and growing businesses.
When managing company spend, it is important to look forward. Learn how Ralston has been helping businesses keep their eyes on the prize and embrace opportunities during the pandemic.
For Ralston, the number one advice they have for the companies they work with is to take advantage of Government programmes. They may choose to put employees on furlough or apply for tax deferral.
Either way, it’s important for businesses to keep up-to-date on available schemes, and apply for those which they’re eligible for and might be helpful to them.
But another step that can’t be overlooked when surviving a crisis is putting together a cash flow forecast. Ralston is helping companies find opportunities based on their cash flow forecast, and every one of their partners have done it, too.
It’s also very easy to make it happen: Kyle suggests using an Excel template, but a portfolio CFO/FD will also put one together for you rather quickly.
For Kyle, the most important metrics to look out for in a crisis are your leading KPIs. Essentially, whatever metrics forecast cash coming into the business, such as sales leads or newly acquired users.
KPIs will be different depending on your industry, of course, but focus on what’s driving your revenue. That’s going to tell you what cash you can expect in the future – and the future is the direction you should be facing.
When the situation changes every week, businesses question what’s going to happen next and what they’ll do about it. Which is why Kyle went deep into scenario planning.
For Ralston, optimising acquisition channels for the companies they work with is crucial. By focusing on this, they’re helping companies achieve their goals instead of just surviving.
Most companies are turning down their marketing spend right now. But, as the crisis continues to unfold, you need to adapt more than you ever needed to and prepare for the opportunities in your way. And that means not pulling back on customer acquisition.
On the other hand, it’s also incredibly important that you talk to your existing customers. You need to learn why your service is so important to them, why they’re still with you even when times are challenging. Besides, it’s always cheaper to retain an existing customer than to acquire a new one.
Unpredictable times call for more frequent forecasting and budgeting.
Businesses are not looking at the next few years anymore, rather the next few months. They’re trying to understand what their cash position will be moving forward.
But budgets can keep changing. For instance, most companies Ralston works with are in a hiring freeze. But if it turns out that this crisis doesn’t last longer than a few more months, companies will end up with cash saved up. So, going after their goals just as they were going to before might be the smart thing to do.
Re-budgeting frequently and understanding how close to budget you’re sticking will bring in a little more predictability so that you can continue to spend on what you really need to survive.
In a crisis, don’t cut costs at all costs. See how financial leaders keep spending in check without compromising long-term growth in our playbook.