Treasury Management Strategies

Businesses large and small across the world are facing the most difficult situation they’ve ever encountered. As COVID-19 continues to wreak havoc, business owners are trying to determine how they're going to maintain and restore cash flow while they reevaluate their short and long-term plans.

Depending on the industry and the size of the business, cashflow and cash on hand can vary widely. The “Small Business Pulse Survey,” conducted by the U.S. Census Bureau during the COVID-19 pandemic, surveyed businesses about the cash they had on hand when the pandemic hit. Nationally, the largest percentage, 48%, said they have enough cash on hand to operate for less than one month. Another 18% of businesses said they had enough to get by for three to four weeks, while 12% said they had enough cash for one to two weeks, and 9.5% said they had fewer than seven days’ worth. Further, JPMC Institute says 50 percent of small businesses have fewer than 15 cash buffer days.

Throughout my years working with businesses, I’ve seen business owners across the spectrum — from those bootstrapping with credit cards on a day-to-day basis to the risk-averse with months of savings on hand. Building and maintaining cashflow, depending on the industry and accounts payable practices, is a challenge many business owners struggle with. From my own perspective, here are some suggestions that can help.

Remain Calm.

When things look dire, people sometimes jump to the worst possible conclusions. While it's smart to prepare for worst-case scenarios, don't overreact about the state of your business. Keep your outlook realistic but explore all possible avenues to keep cash coming in before you make rash decisions that may not be reversible, which you may regret later.

Reassure Customers.

Maintaining Cash Flow During a Crisis Your customers need to know you are still there and how you're handling the situation, regardless if it’s a pandemic or another crisis. Utilize the communication channels available to you to convey a reassuring message. Use your mailing list and social media presence to communicate any changes and remind them that you’re looking forward to seeing them soon and still doing business. Use these channels to let them know how you are uniquely positioned to make their lives easier or better in a time when we’re all facing new challenges together.

Marketing to customers and prospects is still important, but be careful that your message stays relevant and doesn’t appear to capitalize on the crisis. Your customers need to know how you provide value in a time like this. If you demonstrate it effectively, there’s still business to be won.

Focus Marketing Resources.

As you spend your marketing dollars, you'll need to be discerning. Allocate more of your resources to proven channels where you're already getting results. For instance, if social media campaigns are bringing in customers, think about stepping up your digital communication through those channels. To maintain cash flow, you need conversions, so go with what works. Now is not the time for experimentation.


Talk to customers, vendors, suppliers, and anyone else with whom you have a business relationship to negotiate for expanded time to pay expenses. On the flip side, consider extending that courtesy to your customers, as well. They will thank you for it. Your flexibility now can mean a customer for life in the long-term. Remember: Some money coming in is better than no money coming in.

While offering critical flexibility during a crisis, also make sure to get across that any extensions are temporary. In your revised agreements, make sure to note these as “COVID-19 related” or “one-time” situations so you avoid inadvertently making this the new normal. Open communication between businesses is never more critical than during a crisis.

Determine Financing Options.

In response to the crisis, the federal government passed legislation establishing multiple loan and grant programs to support small businesses, including the Paycheck Protection Program (PPP) through the Small Business Administration (SBA). Economic Injury Disaster Loans are also available. Your banker should be able to walk through other options that best fit your business. I always advocate open, honest dialogue with your banker sooner rather than later when you encounter any crisis, small or large, as the right bank will help you avoid pitfalls.

Save On Office Space.

In a pandemic, many workers are working from home. If you are fortunate enough to be in a line of work where this is feasible, consider determining how a set-up like this can work over the long term to help if you have the opportunity to change your occupancy expense. This transition can help you build cash reserves again.

Sell Online.

Now is the time to sell online if you haven’t before. Even as our communities are shifting slowly from lockdown, it’s still safer for most to be at home. Many consumers may remain hesitant about the risks of their physical space in the coming months and years. Make their online shopping experience with you as easy as possible, and make sure they know about this option by alerting them through your best marketing channels. Local businesses should take care to emphasize their investment in our local communities. Buying local is popular in many areas across America and can help your cause tremendously.

Look For A Realistic Pivot Opportunity.

Many businesses have taken it upon themselves to change what they’re doing to help the cause in the COVID-19 pandemic. Consider shifting your focus, which can not only provide a new revenue stream, but also garner goodwill for your business as you are actively working to help people in some new way. Can you offer a different product or service that is more useful given the current situation?

Tap Your Emergency Fund.

As I described earlier, some businesses don’t have any savings, but hopefully yours is in the 48% with some buffer. If cash flow suddenly becomes an issue, it’s time to use it. There’s no better time to start saving than now, so as you build more reserves, make sure to build your emergency fund or replace what you’ve withdrawn from it.

If there's a silver lining to the COVID-19 crisis for small businesses, it's that many are discovering new resilience. Your business may emerge with new efficiencies, as you focus on what’s most important to keeping your operating cash flow positive.