Editors Note: The author is chief executive officer of the Metro Bacolod Chamber of Commerce and Industry, a group that counts at least 200 businesses as members in Bacolod City, the political and economic center of Negros Occidental province.
DNX has partnered with Frank to provide resources for micro businesses that comprise at least 70 percent of the total number of local firms in Bacolod along with small and medium ones.
This is the first in a series.
Don’t go under now…Were almost there.
I. Reduce your Fixed Expenses.
- Reduce your labor force/expenses.
- Go rotation. Don’t lay-off personnel.
- Eliminate representation and entertainment expenses/allowances.
- Pay basic only. Don’t allow overtime work.
- Negotiate for rent discount during lockdown months.
- If possible, request for deferred payment scheme on unpaid rent.
- If allowed, reduce space rented.
- Shut off lights when not in use.
- Reduce food stocks in freezers.
- Practice twice a day washing of cups and dishes.
- Look for cheaper substitutes for office supplies and kitchen supplies.
II. Restructure Bank Loans
- Consolidate short term and long term loans and negotiate for longer repayment period.
- Consider loan take out by Government Financial Institutions (DBP, LandBank) to reduce interest expenses.
- Consider only additional working capital loan when business environment normalized.
- No expansion, no new investment during the pandemic period.
III. Cash Management
- Pandemic period calls for day-to- day cash management. Work for “cash positive”
- Operation – cash inflow exceeds cash outflow.
- Prepare one week cash flow projection, prepare daily cash flow statement.
- Finance your accounts receivable with accounts payable
- Work double time on accounts receivable collections.
- Keep your suppliers happy by paying them on time.
- Suppliers are the cheapest source of funds.
IV. Existing Customers
- Additional services and products
- Avoid incurring expenses for new customers.
- Explore added service or products you could provide for existing customers.
- Consider “Call, Order, Deliver” services. Don’t hire delivery personnel.
- Use existing delivery service companies.