Increasing cash flow for CEOs of consumer products’ companies with < $15 million in sales
Smaller consumer product companies often have challenges creating adequate cash to achieve the company’s goals, such as investing in growth and/or paying owners.
They struggle with:
Managing Cash Flow:
Maintaining healthy cash flow in smaller companies is crucial, not just to cover costs, but for investing in growth or paying to owners. Companies facing these challenges often need assistance in forecasting cash flows, reducing receivables collection time, improving payables and optimizing inventory levels to reduce carry.
Bearclaw Advisory helps develop user-friendly systems to accurately forecast cash flow, improve cash collection, negotiate better vendor payment terms and optimize inventory levels. These systems decrease financial risk and increase available cash for the company.
Often, it’s difficult internally to objectively analyze and control fixed and variable costs. Optimizing labor ROI, decreasing COGS, correcting supply chain inefficiencies, streamlining production and reducing operational costs save cash. Companies often keep the status quo due to worry that these cash savings will come at the expense of competitive quality and service.
Bearclaw Advisory objectively helps optimize productivity, decrease COGS, reduce supply chain efficiencies, improve production processes and lower operational costs to help increase cash. To reiterate, these cash savings will be done without sacrificing quality and service.
Finding the right pricing strategy is vital for consistent cash creation. Companies often don’t have adequate pricing models that account for market demand, competitive pricing, detailed customer costs-of-doing-business, etc. Without these models, companies often leave money on the table in product pricing and customer partnerships.
Bearclaw Advisory helps analyze competitor pricing, market conditions, product elasticities, customer requirements, etc., to determine proper product and customer pricing to optimize $ and % cash contribution. It then develops user-friendly pricing models that company personnel can easily use for sales opportunities.
Through efficient and effective solutions, Bearclaw Advisory gives the highest likelihood of improving cash to invest in growth or pay owners
Questions about how to increase your company’s cash?
Frequently Asked Questions
What are some key areas where Bearclaw Advisory helps increase cash flow, improve profitability and optimize working capital?
- Cash Flow Management & Forecasting – Based on historical and projected sales and expenses, forecasting predicts future inflows and outflows to help anticipate cash shortages, plan for them and enable better financial decision-making. This planning and forecasting is particularly important for seasonal companies. Bearclaw Advisory develops reliable, practical cash flow models that company’s personnel use.
- Optimizing Accounts Receivable – Analyzing current invoicing practices, payment terms and collections processes, then improving them can help shorten cash conversion cycle. Strategies include improving customer credit checks and early payment discount terms.
- Managing Inventory Levels – Assessing inventory management, turnover rates and purchasing practices, then improving them, reduces inventory carry to free up cash.
- Improving Accounts Payable Management – Reviewing current payment terms with vendors can identify opportunities to negotiate extended payment terms, while maintaining good relationships, thereby optimizing cash outflows.
- Cost Control and Reduction Strategies – Identifying where costs can be reduced without sacrificing product quality or customer service can enhance $ contribution, margins and improve cash flow.
- Pricing Optimization Strategies – Analyzing pricing strategies, product profitability, customer profitability and marketing ROI identifies opportunities to increase sales and cash inflow, while more efficiently using resources.
- Financial Reporting and Analysis – Streamlining financial reporting formats and key cash-creation performance indicators (KPIs) provides more timely insights, enabling better and more rapid decision making.
- Accessing Financing Options – Financial planning to obtain additional working capital, when needed, for growth, cost reduction investment and/or liquidity in tight cash flow periods. Financing options can include debt financing through loans, lines of credit, refinancing, etc., as well as various equity financing structures.
- Enhancing Sales Processes – Analyzing and improving sales cycles, distribution methods and product velocities, sales/customer and new customer targeting can lead to quicker and greater cash contributions for products and/or customers.
- Implementing Technology Solutions – Recommending more efficient, cost effective tools for better cash flow management, cash collection and reporting can streamline processes, decrease labor costs and improve overall operational efficiency.