How to Stay in Business When Money is Tight
This episode focuses on one of the biggest challenges small business owners face—how to keep the business running when money is tight. Many entrepreneurs feel the pressure of financial stress, with 57% saying they experience anxiety about money. Still, there’s hope: around 75% of small business owners remain optimistic about their financial future, showing their determination and resilience in staying in business when money is tight. We also talk about how inflation and rising costs are major concerns for about 60% of business owners. Finally, we share simple, practical strategies to improve cash flow, strengthen financial stability, and keep your business steady through tough times—showing you exactly how to stay in business when money is tight.
Check the full podcast episode here
The episode begins by asking an important question: how can small business owners keep going when money gets tight? Many entrepreneurs share this struggle—57% say they feel serious stress about their finances, and the host openly admits he’s faced the same challenges. Yet, there’s still hope. About 75% of small business owners remain optimistic about their financial future, showing strong determination even in tough times. The episode takes a closer look at cash flow problems, especially how inflation and rising costs affect nearly 58% of small businesses. It also points out that a lot of business income in the U.S. is stuck in unpaid invoices, making the situation even harder. Throughout the episode, Ralph breaks down the main causes of these financial struggles and shares practical steps to improve cash flow and stay stable. The message is clear: surviving hard times isn’t just about hanging on—it’s about adapting, making smart financial moves, and rebuilding stronger.
Takeaways:
- A substantial 57% of small business proprietors experience significant stress due to financial challenges.
- It is crucial to maintain open lines of communication with vendors and landlords during economic difficulties.
- Approximately 24% of American business revenue remains tied up in unpaid invoices, exacerbating cash flow issues.
- Targeting existing customers for marketing efforts is often more cost-effective than acquiring new clientele.
- Maintaining a focus on sales growth is essential, especially when financial constraints become prominent.
- Protecting your core team is vital; losing skilled employees during tough times can hinder recovery.
Links referenced in this episode:
To access the action sheet for today's episode click here http://gritandgrowthbusiness.com/action
Tired of feeling stuck in your business? Discover my 12-week coaching program built for small business owners just like you: www.gritandgrowthbusiness.com/coaching
Buy Ralph's Book - Mastering Your Finances!
Buy Ralph's Book - Gospel of Entrepreneurship: Following Jesus in Your Business Journey
Buy Ralph's Book - How to Become a Financially Confident Christian
00:00 - Untitled
00:44 - Untitled
00:48 - Navigating Financial Challenges in Business
08:29 - Transformative Recovery: Beyond Survival
09:25 - Transformative Recovery: Key Strategies for Survival
18:37 - Finding Quick Wins in a Cash Crunch
24:51 - Managing Cash Flow Effectively
29:09 - Selling Your Way Out of a Crisis
31:46 - Survival Strategies in Business
Speaker A
How do I stay in business when money is tight?
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Yeah, that's a real tough question, isn't it?
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And if you're like most small business owners, I bet you've asked that very question.
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Listen, I know I've asked it more times than I care to remember, but I want to start with this.
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You're not alone in this.
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And I want to thank my producer Abby.
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She came up with these statistics for today's show, and I thought these were just perfect.
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Listen to this one.
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57% of small business owners feel stressed about money issues.
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If you're like me, you're probably feeling that right now.
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And the problem with that is when you feel that stress, it lowers that work life balance because you can't let it go.
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You're always in that mindset of stress about money issues.
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But here's some encouraging news that also we found in the statistics.
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75% of owners are still hopeful about their financial future each year, and they remain positive even with economic challenges.
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So what does that tell us about most small business owners?
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Most small business owners are.
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Are optimists.
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Let's move on to the nest we found today.
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58% of small business owners say inflation and rising costs are their biggest worries.
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Well, of course, if you think about it, if we're talking about cash flow and we're talking about how to stay in business when money is tight, well, of course inflation and rising costs are gonna challenge that.
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But 58%, nearly 60%.
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And these are the main reasons for their financial struggles.
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And then we started to get a little deeper into it.
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Okay, well, why is the financial struggle so tough?
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And we looked at typical American business revenue, and I was actually surprised when Abby found this statistic.
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24% of typical American business revenue is stuck in unpaid invoices.
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And we've done some shows on that.
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Your customer's got to pay you.
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Let's start there.
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And that's one of the big reasons for cash flow issues.
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Here's another interesting one.
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50% of owners say they've raised prices, deal with rising costs and tight finances.
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Well, again, that makes sense, doesn't it?
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And truthfully, that's usually the fastest solution to this.
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And listen to this one.
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Almost one in three.
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31% of small business owners now rely more on credit cards to handle cash flow problems.
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Yeah, that's a sobering statistic.
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When I read that one, I was kind of concerned.
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And the problem with credit cards, that increase in borrowing is at the highest possible interest rate.
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Yeah, it's a quick fix.
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Which led me to this really great question I got from one of our listeners, Ralph.
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Sales are down and bills keep piling up.
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I'm scared I won't be able to keep my doors open.
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I don't know which expenses to cut without killing my growth.
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And I'm torn whether to take on debt just to survive or if that's just digging a bigger hole.
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My employees are counting on me, but some weeks, I don't even know if I can make payroll on Friday.
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Should I be pushing harder on sales or shrinking back into things improve?
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How can I make the right call before it's too late?
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What a great question.
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There's a lot in there.
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There's a lot of things we got to unpack there.
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But these really are important questions.
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And as you're listening or watching this right now, you might be feeling the exact same way.
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You're thinking, hey, Ralph, I'm right there with this person.
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So again, you're not alone in feeling this way.
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So let me share some truth with you before we even get jumping off today, the number one cause of small business failure is cash flow issues.
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It's just a simple truth.
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So we got to figure out, how do we deal with cash flow.
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It's not a lack of ideas and it's certainly not a lack of effort.
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Most small business people are hard working people.
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And that's why I want to do this show today.
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Because when money gets tight, the right decisions can keep you afloat.
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Or here's the problem, making those wrong decisions, they can sink you really quick.
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And if you fail when you stop adapting, that's when money gets tight.
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But I don't want you to fear today because I've got a survival playbook for you today.
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Today I'm going to give you practical steps to cut cost, protect cash and and stay in business.
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Yes, I've got the answers for you on today's show.
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So let's get in the trenches together today.
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Running a business isn't easy.
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It's long hours, tough calls, and relentless pressure.
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No shortcuts, no handouts.
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Just grit, grind and the will to keep going when most would quit.
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Welcome to Grit and Growth Business, the show for entrepreneurs who know success is built the hard way.
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Hosted by Ralph Estep Jr. A seasoned business coach, accountant, and fellow fighter in the trenches.
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Each episode brings you real talk, proven strategies, and the unfiltered truth about what it really takes to build something that lasts.
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Because if you've got persistence, perseverance, and determination, this is the place for you.
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This is grit and growth business.
Speaker A
Hello there.
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Welcome back to our weekly grit and growth business.
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I'm Ralph.
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I'm a fellow small business owner just like you.
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Yes, I'm right here in the trenches with you each week.
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And if you're like me, it feels like a fight some days, doesn't it?
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And listen, this isn't my first rodeo, as they say.
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I've been 30 years as an accountant and a coach.
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I've walked owners through recessions, slow seasons and unexpected downturns that, hey, listen, I've lost some people along the way.
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And during that time, I personally run businesses through tough cycles.
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Yes, I've made the hard calls and I've seen both sides of this.
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I've seen owners who panicked and closed the door, said, ralph, I can't do this anymore.
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I'm just going back to a regular 9 to 5 job, let somebody else handle the worry.
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But at the same time, man, I have seen brilliant small business people who tighten up.
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They adapted, and guess what?
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In the end, they actually came out stronger.
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Which leads me to a story, let me tell you about a restaurant owner client that I have.
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This was during COVID just a few years ago.
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Restaurant owners saw that their business was going to fail because, listen, people couldn't come in and eat.
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We had that big massive shutdown in the US People weren't allowed to go into restaurants.
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And I remember he called me, he's like, ralph, what do I do?
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And I said, hey, listen, I'm right there with you.
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We're all trying to figure out how to, how are we going to survive this?
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And I said, one of the big things that I encourage you to do, and I'll talk a little bit about this later in the show, is communicate.
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So the first thing he did, he called his landlord.
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He said to his landlord, he said, listen, you know what's going on?
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Of course the landlord, he will knew what was going on too.
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And this particular lease space was just one of the ones that the landlord had.
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So he was getting these calls from everybody and that restaurateur, he was able to negotiate with the landlord and they work something out, they were able to survive that downturn.
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Now, he got a lot of help from business, small business loans and all those sort of things.
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But it was that communication, it was that reaching out to the landlord, it was that level of understanding and working with somebody that led to him getting through that tough time.
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But let me tell you about another contractor client who wasn't so wise in this decision.
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Another contractor, he was suffering a tough time in his business.
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And like most small business people, what did he do?
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He cut his staff, he cut his advertising, he cut all these different expenses.
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But the problem was he got past that.
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And when the work continued, when he started getting the phone calls again, guess what happened?
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He didn't have any staff to meet the demand.
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And when customers called, he couldn't get back to them in time.
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Guess what happened?
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He lost his reputation and ended up losing his business.
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And I found this quote that I thought was really great about business, Reliance Research.
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And it says, survival is not the goal.
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And you may have thought, today, how do I survive these cash flow crunches?
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Yes, survival is part of it, but that's not the goal.
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What the real goal is, and this is the big takeaway for today, it's about transformative recovery.
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And you're going to say, ralph, what in the world does transformative recovery mean?
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I'm going to get to that in a few minutes.
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But let me give you another example.
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I had a client who was a retailer, and as soon as his business started to take a downturn, what'd he do?
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He froze inventory purchase.
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He said, listen, Ralph, I got a whole warehouse full of inventory.
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It's not time to buy right now.
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What else did he do?
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He doubled down on selling what he had.
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He looked around the warehouse and he said, ralph, I got all these things.
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Let me put a sale.
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And he improved the margins.
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And that right there, if you listen to me right now, that's what I'm talking about when I say transformative recovery.
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It's not just survival.
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If you just survive, guess what?
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You're not going to survive.
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I hate to tell you that, but there's some tough love from Ralph today.
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If you're just trying to survive, it's not going to work.
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So now you're asking Ralph.
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Okay, that's great.
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I like the idea of transformative recovery, but how do I actually create such a thing?
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Guess what?
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I've got the answers.
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I've got seven key things that you need to do immediately to survive.
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So if you're ready, let's get this party started.
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Number one thing, and I've talked about this on the show so many times, you're probably like, ralph, if I hear this again, I'm gonna reach out and pop you.
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But the truth is, the number one thing, you gotta know your numbers.
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And trust me, working with clients for 30 years, a lot of small business people have no idea what their numbers are.
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A lot of them come to me at tax season.
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They're like, okay, how'd I do last year?
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I'm like, what do you mean, how did you do last year?
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If you don't know how you did last year, we got bigger issues.
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So know your numbers and treat that cash flow as king.
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A lot of people say, what cash flow, Ralph?
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Heard of the profit and loss statement and.
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And some of them even, I've heard about the balance sheet.
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We're getting to some accounting lingo, but cash flow is king.
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You might be saying, okay, Ralph, what does that mean?
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Well, it's not that complicated.
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Don't overthink.
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Really comes down to this.
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You got to track every single dollar coming into your business and every single dollar going out daily.
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Notice I didn't say monthly, I didn't say yearly.
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I said daily.
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You can't wait till the end of the year.
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Like I said, I've got so many small business clients that wait till the end of the year, and then they're like, okay, what happened at that point?
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Unfortunately, it's too late.
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I see this to clients that I coach every day.
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And I'll tell you about how to get in touch with me for some coaching services later in the show.
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But you got to understand where your numbers are today.
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Not tomorrow, not next week, but today.
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So it starts there.
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Know your numbers.
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That's the number one thing.
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Second thing, and this one is a little bit hard, but you gotta slash expenses now, just like in your own personal budget.
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Now, I do a daily show called Financially Confident Christian where I talk about how to overcome those financial challenges, that financial shame, and live in confidence.
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Well, guess what?
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As a business owner, you gotta do the same thing.
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We talk a lot in that show about needs versus wants, what you need versus what you want.
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Well, you gotta do the same thing as a business owner.
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So I challenge you.
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Number two on my list, slash expenses.
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Separate those must haves.
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Those things you've got to have.
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Listen, if you're a small business owner, you got to have electricity.
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If there's no electric on, you can't run your business.
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You got to have a telephone system.
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You may need to have employees.
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You may need to have insurance.
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Things are the must haves.
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Listen, your business won't survive without them, but chances are you've got some of those nice to have things as well.
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Oh, Ralph, I'd really like to do this, and I'd really like to do that.
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Well, I'd really like you to stay in business.
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So you've got to make tough decisions sometimes and really cut those things.
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I've even Gotten to clients that said, pull your bank statement for your credit card statement from last month.
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And right next to each and every charge, was that a must have or a nice to have?
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And when you do that exercise, you're like, whoa, wait a minute, Ralph.
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I never expected it would be that amazing.
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You got to understand the needs versus the ones.
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So that's the second thing.
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Slash expenses and really identify those must haves from the nice to have.
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And listen, that's painful, but you got to do it.
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Let's move on to number three.
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And my restaurant client learned this, and I've learned this many times in my life.
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Communicate early.
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Here's the thing about life.
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People want to work with you.
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I used to run a credit union.
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I was the executive vice president of credit union.
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As part of my job, I work with people in collections.
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You know, they had a tough time, maybe they lost their job.
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There was a downturn in the economy, whatever those things were.
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And I would say to my collection staff, listen, let's go out and talk to.
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We called them members in the credit union, not customers, but they were members.
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I said, let's go talk to our members.
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And they're like, ralph, they won't even answer the phone.
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I said, here's the other side of that.
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And this is kind of the truism of life.
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People want to pay their bills.
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I truly believe this with my heart.
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People want to pay their bills.
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Now, there are some scoundrels out there who don't want to pay their bills.
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Those are just bottom feeders.
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We're not going to work with them.
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We can't help them anyway.
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But most people want to pay their bills.
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So I always encouraged my people to talk to our members.
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Well, I'm encouraging you from the other side of the fence.
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When you're in an economic downturn, talk to your vendors, reach out to your vendors and say, listen, I know I'm a little late with this payment, but here's what's going on.
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Here's my plan, how to solve it.
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You're going to be first paid.
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Talk to your landlord.
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Just like my restaurant client did.
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Reach out and say to the landlord, hey, you see what's going on?
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I am going to pay you.
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Here's what I'm doing to make that work.
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And for.
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Listen to me, Talk to your lenders.
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Don't just go into default.
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Most of the banks, most of the lenders want to work with you.
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Because here's the deal, they've got examiners, too.
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They don't want to Write off these loans.
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This isn't a time to hide.
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So many small business people I've worked with say, okay, when things are tough, I hide.
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I can't find them.
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You can't reach these people on the phone.
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That is the worst possible thing that you can do.
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If you're not listening to me right now, listen very carefully.
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Don't hide.
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So many small business owners.
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Try to keep it quiet.
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Oh, I'm just going to pretend like nothing's going on.
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That's a terrible plan.
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It's a sure way to completely eliminate your business.
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You want to sink that business ship?
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Hide from your problems.
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Realize that most vendors, most landlords, most lenders want to work with you.
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They don't want you to lose it all.
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Because guess what?
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If you lose it all, they lose it all, too.
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This is what I used to say to my credit union members all the time.
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If you stop paying your car loan, let's just use a real simple example.
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You get a car loan from me.
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You go, you drive your car.
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Oh, I love this car.
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Well, then all of a sudden, you lose your job.
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Well, guess what?
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You can't afford to make the payments.
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Well, I don't want the car back.
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If you bring me the car back, I'm going to lose a lot of money.
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So guess what?
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I want to work with you.
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So that's number three.
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Don't go hide.
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Communicate.
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Let's move on to number four.
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And this one a lot of people overlook, especially small business owners.
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As soon as something happens, they're like, well, I'm going to get rid of this person and get rid of this person.
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You got to protect your talent.
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And the problem is, most people say, well, Ralph, but that's my highest cost.
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Yes, it may very well be your highest cost, but it's also the reason that you have revenue.
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So first thing I want you to do as you're thinking about, how do I do this?
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Protect your talent.
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Keep your best employees.
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Now, this may be a great time to cut out the knuckleheads in your organization.
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People who aren't doing a good job, people who aren't meeting the requirements of the job.
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Sure.
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Cut the wrong staff, great.
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But if you cut the good staff, you're going to kill your ability to recovery.
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That's what my contractor friend learned.
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When the business started to recover, he had cut all his good people.
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They went to work with other people.
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Some of them actually went out to work on their own.
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And he was now competing with his former employees.
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And if you do that, if you cut the wrong people, you're going to completely destroy your ability to recover.
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Yes, your business might start to see a recovery, but you're not going to be able to meet the demand.
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You're not going to be able to handle that.
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So that's number four.
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Protect your talent.
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Now, like I said, that's a little counterintuitive.
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A lot of people like, yeah, but that's the highest cost people.
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But those are the people you got to focus on.
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Number five thing.
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Like I said, there's seven of these.
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Number five, target marketing.
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Another thing a lot of people do when business starts to downturn, they say, well, I'm going to stop advertising because again, advertising is a big cost.
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They say, ralph, I'm not going to advertise anymore because advertising cost me a lot of money.
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I'm going to pull back.
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But here's the problem with that.
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If you do that, nobody knows that you're there.
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So what I say, instead of doing that, target your marketing.
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You may be saying, okay, Ralph, what do I do?
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Target your existing customers.
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Focus on those.
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Here's why.
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The truth is, marketing to your existing customers is much cheaper than acquiring new ones.
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It's just simple.
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These are people that love you.
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These are people that support you.
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These are people that want to be engaged with you.
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I was talking to, to Abby, my producer, earlier in the show.
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She's developing a printing business.
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And in her printing business, when things get tight, she said to me, she said, ralph, what we do is we go back to the people we've done business with before and we go say to them, hey, you really liked what we did before.
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Would you like us to do it for you again?
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It's time to reinforce those relationships.
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It's time to build on that.
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Because these are your brand ambassadors.
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These are people that will go out and tell other.
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Listen, here's the truth about business.
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Most business advertising doesn't work.
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What does work is referrals.
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People go out there and tell, oh, Ralph does a great job with business or such and such.
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Does a great job with her restaurant or this contractor.
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He's great.
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Listen, when you're going to find somebody to do business for you, what do you do?
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You ask other people, you say, hey, who did you use for such and such?
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So when your business is starting to struggle, when you're starting to see things tighten up, reinforce those relationships.
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This is a critical time.
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You can't afford to lose those people.
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And I'm going to tell you, I mentioned this on the show a couple weeks ago.
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I lost two big clients a few years back and, man, I was panicking.
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I told you, I got into a funk.
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I didn't think I was ever going to come out of this.
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But when I got my head out of my rear end, to be blunt, I said, let me go reinforce those relationships.
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I doubled down, I called my clients.
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I spent more time talking to the people that are my people, my people around me that really wanted to see me be successful.
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And like I said, this can seem counterintuitive, but trust me on this.
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I got 30 years of street cred on this.
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It works.
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So when you start to think, oh, I'm gonna cut my advertising, don't do that.
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Go in deeper, but focus on the target of your existing customers.
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Trust me, it's gonna work.
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So that's number five, target marketing.
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Let's move on to number six.
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It's time to find some quick wins.
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Listen, we are in a cash crunch.
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It's a legitimate issue.
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You might be saying, okay, Ralph, I'm in a cash crunch.
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I got payroll to meet this Friday and I don't know if I'm going to have the money to do it.
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That's a very common thing.
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Listen, I do payroll for clients.
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We do about 100 payrolls a week here in my accounting practice.
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I get it.
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We say to clients, make sure you've got that money in your account come Thursday, because Friday morning your employees are going to the bank.
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They want their money.
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So you got to find some quick wins, sometimes find some immediate ways to boost cash.
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Now you might be saying, okay, Ralph, that sounds great, but how do I do it?
Speaker A
Discounts are great.
Speaker A
Offer early payment discounts.
Speaker A
Hey, if you've got a warehouse, go look in your warehouse and see what's sitting in there and offer some of those things for sale.
Speaker A
One of my clients sells stuff.
Speaker A
They bundle stuff together.
Speaker A
They might have one particular item that's selling great and they've got this other.
Speaker A
They may have bought something like, yeah, I thought this was going to sell, Rob, but it's not selling at all.
Speaker A
Go find those things and bundle them together.
Speaker A
Hey, you can get a little bit for something versus getting nothing for it and letting it sit on the shelves.
Speaker A
Another great idea is prepaid sales.
Speaker A
Let me tell you about something I did.
Speaker A
I guess it was about 10 years ago, my accounting practice.
Speaker A
I was in that cash crunch myself.
Speaker A
And I started to think to myself, okay, how do I build some cash for year end?
Speaker A
I had some things I wanted to do, I had some marketing I wanted to be prepared for tax season.
Speaker A
Well, here's what I did.
Speaker A
I thought it was a brilliant idea if I want to pat myself on my own back.
Speaker A
But I thought, this is a great idea.
Speaker A
I reached out to again, I targeted my existing clients and I said, hey, I got a great idea for you.
Speaker A
You're a monthly client of mine.
Speaker A
I'm going to offer you a discount if you agree to sign up for next year and you agree to prepay for the entire year.
Speaker A
And I was amazed how many people said, yeah, that's a great idea, Rob.
Speaker A
It's going to save me money and it's going to bring in quick cash for me.
Speaker A
And here's the deal.
Speaker A
The clients got a discount.
Speaker A
I offered a 5% discount, which isn't a lot of money.
Speaker A
But here's the thing it did.
Speaker A
It ensured that that client was going to be a client for all of next year.
Speaker A
Well, guess what?
Speaker A
That did.
Speaker A
It freed up my marketing budget.
Speaker A
I didn't have to go spend money to reinforce that marketing.
Speaker A
I had to spend less on ads.
Speaker A
And it brought in that quick cash.
Speaker A
So sometimes the answer is really, how do I bring in that quick cash?
Speaker A
So that's number six.
Speaker A
Go look for those quick wins.
Speaker A
It's okay to have quick wins.
Speaker A
Now listen, I'm not saying to run your business like that every day, I think that's a bad way to run business.
Speaker A
But when you're in this crunch, when you're in that crisis situation, guess what, you got to react in a crisis situation.
Speaker A
And that's one things I recommend doing.
Speaker A
Number seven, here's the thing.
Speaker A
Keep selling.
Speaker A
A lot of times when small business owners feel the crunch, the first thing you do is they focus, they hyper focus on expenses.
Speaker A
Man, they spend day after day looking at every single expense.
Speaker A
And guess what happens?
Speaker A
They're not spending any time growing sales.
Speaker A
And there's really two ways to solve this problem.
Speaker A
To be very candid with you, grow your revenue or reduce your expenses.
Speaker A
But the problem is a lot of people just look at that expenses.
Speaker A
They become hypersensitive to, well, how much did we spend on this and how much?
Speaker A
I'll give you a great example of this.
Speaker A
It's a hilarious example.
Speaker A
Picture this.
Speaker A
I was right out of college, I was working for my dad's accounting firm.
Speaker A
And I'll never forget this one meeting he calls all of his accountants in.
Speaker A
There was probably about four of us.
Speaker A
Now each of us is making about $100 an hour that we would bill clients back at the time this was back in.
Speaker A
I want to say maybe 1998, for example, early in my career pulls us in.
Speaker A
We're having this meeting.
Speaker A
My dad sits down, and my dad has been in business forever.
Speaker A
A smart business guy, a mentor to me in a lot of ways.
Speaker A
But he pulls out a paperclip, and he holds up this paperclip, and he says, listen, I don't understand what's going on here.
Speaker A
This is the first time in 20 years I've had to buy paperclips.
Speaker A
And I'm sitting there going to myself, are we really having a meeting about paperclips?
Speaker A
Well, here's the thing.
Speaker A
My dad was focusing in on costs.
Speaker A
He was focusing in on how much those paperclip costs.
Speaker A
Yes.
Speaker A
He had to go buy paper clips.
Speaker A
Well, of course, I'm a little smart Alec, right?
Speaker A
So I'm the young buck in the room, and I'm like, all right, dad, let me ask you a question.
Speaker A
I said, how much is a paperclip?
Speaker A
He's like, oh, you're being a smart Alex.
Speaker A
And I said, no, answer this question.
Speaker A
How much is a paperclip?
Speaker A
He says, I don't know.
Speaker A
I said, how much is a box of paper clips?
Speaker A
I don't know.
Speaker A
$2.
Speaker A
Okay, so if we were to buy a gross of paperclips, a gross 144boxes, this picture, this in you.
Speaker A
You'll get to this in a second.
Speaker A
Anyway, I said, let's buy a pallet of paperclips.
Speaker A
How much would a pallet of paperclips be?
Speaker A
I don't know, son.
Speaker A
Maybe $150.
Speaker A
I said, okay, well, guess what?
Speaker A
There's four of us in this room and you.
Speaker A
That's five accountants at $100 an hour.
Speaker A
We just spent $500 of our time chasing after a paperclip.
Speaker A
And at the same time, we could have been out there building revenue.
Speaker A
And so many small business people do the same thing.
Speaker A
They focus on expenses.
Speaker A
They feel, well, I got to cut this light bill.
Speaker A
I got to cut this electric bill.
Speaker A
I got to cut this telephone bill.
Speaker A
That is the wrong thing to do.
Speaker A
Yes.
Speaker A
Look at your expenses.
Speaker A
Great.
Speaker A
But focus on selling, because you're going to solve your problem faster by bringing money in the door than what goes out the door.
Speaker A
That's just the truth.
Speaker A
Find those quick wins.
Speaker A
And while I'm talking about quick wins, one of the things I do every week on this show is I provide you with an action sheet.
Speaker A
I'm going to call it Today's Playbook.
Speaker A
You can always get our action seats by going to gritngrowthbusiness.com action.
Speaker A
I'll give you that again.
Speaker A
But here's a little secret.
Speaker A
Once you sign up for this, guess what?
Speaker A
You're going to get all of them from this episode and back.
Speaker A
And every week there'll be a new one.
Speaker A
Go to gritandgrowthebusiness.com action and download your action sheet.
Speaker A
All right, so now you've got my ideas.
Speaker A
Here, let me share some gritty ideas to make these things happen in your business.
Speaker A
These are my main tips for this week.
Speaker A
First thing I want to tell you, it's all about cash.
Speaker A
We talked about this a few minutes ago.
Speaker A
Know your numbers.
Speaker A
Stop worrying about monthly reports.
Speaker A
Yes, your accounting person maybe talks about monthly reports.
Speaker A
You have a monthly meeting with your account.
Speaker A
Maybe you have a monthly meeting with your staff.
Speaker A
That's great.
Speaker A
But that doesn't help you with cash flow.
Speaker A
You got to start using what I'm going to call a 13 week cash flow forecast for daily awareness and zero surprises.
Speaker A
Listen, you can't wait till month end to know what's going on with your cash.
Speaker A
I'm even going to challenge you.
Speaker A
I would run that report every day, every morning when you get up and start your business for today, understand where your cash is, understand what's going out today, what's coming in this week.
Speaker A
And so that you can make better decisions.
Speaker A
It's all about managing that cash.
Speaker A
Don't wait till the end of the month, don't wait till the end of the closing period.
Speaker A
Say, oh, let's see where cash is.
Speaker A
You got to know what that is today so that you can make decisions.
Speaker A
So that's number one, get cash clarity.
Speaker A
Number two, triage your expenses.
Speaker A
Here's a little novel idea.
Speaker A
I came up with this at one of my clients a few years back and this was revolutionary.
Speaker A
I want you to take your expense sheet and I want you to rank all your expenses.
Speaker A
Are you ready for this?
Speaker A
Here's what I want you to do.
Speaker A
Take a list.
Speaker A
List all your expenses for the last 60 days.
Speaker A
Just write them down.
Speaker A
Here's what I spent, here's how much it was.
Speaker A
And this is what I want you to do.
Speaker A
I want you to write right next to it one of three things.
Speaker A
Survival, growth, or luxury.
Speaker A
Are you ready for that?
Speaker A
So again, survival, growth or luxury.
Speaker A
And just go down expense after expense.
Speaker A
It's kind of like that.
Speaker A
Needs versus wants.
Speaker A
Explanation we talked about earlier.
Speaker A
Survival, growth or luxury.
Speaker A
And guess what you're going to do?
Speaker A
Cut the luxuries first.
Speaker A
If it's a luxury, guess what?
Speaker A
You're not in Luxury land, you know, you can't afford to do that and only keep things if they're survival or growth.
Speaker A
Only keep them if the return on investment is proven.
Speaker A
Yes, I need this to survive.
Speaker A
I got to keep that.
Speaker A
I need this to grow.
Speaker A
I'm going to keep that.
Speaker A
But if it's a luxury, guess what?
Speaker A
This isn't time to be luxurious.
Speaker A
This isn't a season for that.
Speaker A
I'm a believer in seasons of life.
Speaker A
Well, there's seasons of your business as well.
Speaker A
Sometimes you got to cut those luxuries.
Speaker A
Yeah, it's like, oh, I'm the business owner, Raf.
Speaker A
I shouldn't have to live like this too.
Speaker A
Too bad.
Speaker A
You want your business to survive, you want your business to thrive, then you got to live on the cheap for a little bit.
Speaker A
Survival and growth.
Speaker A
So that's number two, expense triage.
Speaker A
Number three, you got to negotiate.
Speaker A
We talked about this a few minutes ago.
Speaker A
Whatever you do, do not default on loans.
Speaker A
Do not default on your lease.
Speaker A
Do not default on rent.
Speaker A
Talk to these people.
Speaker A
Talk to your landlord.
Speaker A
Listen, I'm a landlord.
Speaker A
If somebody comes to me and says, ralph, I'm struggling right now, I'm going to try to help them.
Speaker A
I want to coach them how to get them out of the position they're in.
Speaker A
Because guess what, it's a lot cheaper for to keep them than to go find another person to rent a building.
Speaker A
Banks want you to do the same thing.
Speaker A
Your suppliers don't want to lose money on you.
Speaker A
Call them, hey, what can we do to make this work?
Speaker A
Ask for new terms, ask for some breaks.
Speaker A
Because here's the one.
Speaker A
They want you to survive.
Speaker A
Because guess what?
Speaker A
If you don't survive, they don't survive.
Speaker A
I say this to clients all the time.
Speaker A
It's got to be a win win situation.
Speaker A
If I have a new business client or new coaching client, my goal is to make them successful.
Speaker A
Because guess what?
Speaker A
If they're not successful, I'm not successful.
Speaker A
But the other side of that is if they are successful, guess what?
Speaker A
They're going to tell 100 people, oh, you got to have Ralph help you.
Speaker A
Your business works the same way.
Speaker A
Your customers want you to be successful.
Speaker A
Your landlord, your bank, your suppliers, all your vendors, they want you to be successful.
Speaker A
So negotiate.
Speaker A
Talk to them.
Speaker A
Don't hide.
Speaker A
So many people say, well, Ralph, I can't find this person.
Speaker A
They're hiding.
Speaker A
Bad plan number three thing.
Speaker A
Protect your core team.
Speaker A
And I've mentioned this a couple times about this already because, listen, this is one of the biggest struggles I see people do you got to be strategic in these times?
Speaker A
Don't cut your best staff to save cash now, because guess what?
Speaker A
That does.
Speaker A
And I've seen businesses completely fail because of this.
Speaker A
If you cut the wrong people.
Speaker A
When your business is able to recover, maybe you hunker down and you're able to make this work, but you can't deliver.
Speaker A
At that point, all your people have flown the coop.
Speaker A
They're gone.
Speaker A
They're working for themselves that are working for somebody else.
Speaker A
So protect your core team.
Speaker A
Be strategic in that.
Speaker A
And don't forget, your current customers are a gold mine.
Speaker A
Yes, you heard me right.
Speaker A
Your current customers are a goldmind.
Speaker A
Your repeat buyers are your best asset.
Speaker A
You got to recognize that when I suffered a downturn in my business, that's what I did.
Speaker A
I doubled down on the people that said, I love Ralph.
Speaker A
Yes, there are people out there that love Ralph, believe it or not.
Speaker A
But I focused on those people.
Speaker A
I focused on those loyal relationships, I focused on referrals, and I focused on, guess what?
Speaker A
Upselling to my current people.
Speaker A
A lot of people don't think about that one.
Speaker A
Focus on upselling to the people who already on your team, they already believe in what you do.
Speaker A
Don't lose sight of that.
Speaker A
And the final thing, big takeaway for today.
Speaker A
Sell your way out.
Speaker A
It's not a popular thing.
Speaker A
You don't hear a lot of business gurus online saying, sell your way out.
Speaker A
But this is not the time to shrink.
Speaker A
When you're in a cash crunch, sell your way out.
Speaker A
Yes, you can save some money.
Speaker A
Like I said, triage those expenses, but focus on sales.
Speaker A
Balance those cuts with aggressive created selling.
Speaker A
Get creative in your selling.
Speaker A
Boost revenue, do the sales, do the discounts, do the bundle things.
Speaker A
Listen, think of some things that you would.
Speaker A
Ralph, I would never do this.
Speaker A
Well, this is the time to do it.
Speaker A
So let's talk about some key questions based on what we've discussed today.
Speaker A
Some things that I want you to really ponder over the next week.
Speaker A
Ask yourself this question.
Speaker A
If cash runs out tomorrow, you better have that report to know this.
Speaker A
But if cash runs out tomorrow, which bill gets cut first?
Speaker A
Listen, if you want to be an effective business survivalist, that's a good term to use today.
Speaker A
You want to be an effective business survivalist, you better know the answer to this.
Speaker A
If cash runs out tomorrow, which bill gets cut first?
Speaker A
Know that answer.
Speaker A
Have that on a document.
Speaker A
Have that in your mind, what you're going to do.
Speaker A
Number two question.
Speaker A
Are you cutting expenses or are you cutting your ability to grow?
Speaker A
Because listen, the Natural tendency.
Speaker A
Most small business people, it's easy to cut expenses because they can see them.
Speaker A
It's hard to cut growth.
Speaker A
Growth.
Speaker A
But what you don't realize is sometimes when you cut those expenses, you're cutting off the lifeline that provides for growth.
Speaker A
Number three, question and listen.
Speaker A
I had to ask myself this question and I got in a bad spot when I really started thinking about this.
Speaker A
Which 20% of customers deliver 80% of your revenue?
Speaker A
And we may do a show about why that's not a good way to be in general.
Speaker A
But ask yourself this question.
Speaker A
Of my customers, what 20% of my customers deliver 80% of my revenue?
Speaker A
Are you taking care of those people?
Speaker A
Are you calling those people?
Speaker A
Are you out there talking about, hey, what can I do to help your business grow?
Speaker A
How can I build this loyal relationship if you're not doing that?
Speaker A
What did I talk about?
Speaker A
Targeted marketing.
Speaker A
It's the time to do it.
Speaker A
Here's another great question.
Speaker A
I think you should have this on your desk at all moments.
Speaker A
Ask yourself this question.
Speaker A
What can you sell today to generate cash in 48 hours?
Speaker A
It's the proverbial fire sale.
Speaker A
Have a list of those things, Ralph, if cash gets tight, here's what I can do.
Speaker A
Here's what I can go to generate cash in 48 hours.
Speaker A
Know those things ahead of time.
Speaker A
Hey, let's hope you never have to use it.
Speaker A
Let's hope you never have to deep discount or bundle those things together.
Speaker A
Listen, things are good.
Speaker A
Don't do that.
Speaker A
No reason to offer discounts when business is good.
Speaker A
Take care of your existing customers, your loyal customers, but have that, that 48 hour sheet ready to go.
Speaker A
What can you sell today to generate cash in 48 hours?
Speaker A
Because maybe you're in that payroll crunch for this Friday.
Speaker A
And here's my final question for today, and this is a tough one.
Speaker A
Ask yourself this question.
Speaker A
How would you run the business with only three months survival window.
Speaker A
If you only had three months to survive?
Speaker A
You think about it in your own life, if you found out right now that you got three months to live, it's kind of a tough thing to talk about.
Speaker A
How would you live differently?
Speaker A
What would you do differently?
Speaker A
I'm going to challenge you right now.
Speaker A
You want to be effective in your business?
Speaker A
Run your business like that.
Speaker A
Now, I'm not saying run your business into the ground because, hey, I'm gonna run up all the debt I can because I'm gone in 90 days.
Speaker A
No, that's not what I'm saying.
Speaker A
But how do you survive?
Speaker A
How do you thrive have that plan ahead of time, have that scoped out ahead of time.
Speaker A
How would you run your business with only a three month survival window?
Speaker A
And I know these are all tough questions I've had to ask myself.
Speaker A
These very questions, let me just tell you right now, they may be your only chance at survival.
Speaker A
Now I know we've covered a lot today, so let's take a minute to just recap again.
Speaker A
I'm going to focus on this like a laser beam.
Speaker A
It's all about cash.
Speaker A
Cash.
Speaker A
You need to know where it is, control it.
Speaker A
And that's non negotiable when you're looking to cut expenses, cut those luxuries, not those lifelines.
Speaker A
Don't cut those things that help you grow your business.
Speaker A
Listen, communicate.
Speaker A
Negotiate before you default.
Speaker A
As I've said 10 times today, most partners want you to survive and thrive.
Speaker A
Keep your best team members and your core customers close.
Speaker A
Target that marketing.
Speaker A
Talk to the people who love you, those I love, Ralph people.
Speaker A
And focus on sales, not just savings because sales are going to keep you alive.
Speaker A
Now maybe right now you're thinking, ralph, this all sounds good, man.
Speaker A
I've been in those sleepless nights, but I really need somebody to help me.
Speaker A
Well, here's the cool thing.
Speaker A
You don't have to do this alone.
Speaker A
Like I said, I've been doing this for 30 years.
Speaker A
I've seen a few things in my career here.
Speaker A
And I help business owners just like you create these survival plans at work.
Speaker A
If you want to work with me, I'm going to offer you a free discovery call.
Speaker A
It's 15 minutes absolutely free of charge.
Speaker A
Let me get to know you.
Speaker A
Let me get to know what's going on in your business.
Speaker A
Go to this website.
Speaker A
Go to gritandgrowthbusiness.com coaching again, it's gritngrowthbusiness.com coaching and let's have a call.
Speaker A
Let's talk about what's going on in your business.
Speaker A
Let me help you get to that point where, where you're not worried so much, where you're not living in that constant anxiety.
Speaker A
Listen, I deal with this every day.
Speaker A
I deal with so many small business clients who are struggling.
Speaker A
You don't have to struggle alone.
Speaker A
I'm there to help you.
Speaker A
Go do your discovery call again.
Speaker A
That's@gritngrowthbusiness.com coaching.
Speaker A
Set up that call today.
Speaker A
And here, don't forget about this.
Speaker A
This is kind of cool.
Speaker A
We started this a couple weeks ago.
Speaker A
Every Tuesday night I go live.
Speaker A
Yes, you can see me live.
Speaker A
If you're listening to this you get to see my pretty face.
Speaker A
But every Tuesday night, 8pm you it's grit and growth live.
Speaker A
We tackle these challenges like we talk about on the show.
Speaker A
But here's the best part of this.
Speaker A
You can actually come in and chat with me.
Speaker A
Hey, you can even join the show if you want to.
Speaker A
I'll do live coaching.
Speaker A
But join me every Tuesday night at 8pm simple way to get there.
Speaker A
We do it on YouTube.
Speaker A
We do it on Rumble, we do it simulcast on LinkedIn.
Speaker A
But you don't have to worry about any of those things.
Speaker A
Just go to this website, gritandgrowthbusiness.com live.
Speaker A
Really simple.
Speaker A
We'll put it in the show notes.
Speaker A
Abby will make sure it's in the show notes today.
Speaker A
But it's gritandgrowthbusiness.com live.
Speaker A
All right, well, that's your survival playbook for today.
Speaker A
And like I said, you can get a copy of this survival playbook because, hey, you might not need it today, but you might need it tomorrow.
Speaker A
Or even better, maybe you know somebody else that could use it.
Speaker A
Well, get your copy of today's survival playbook, our action plan for today by going to gritandgrowthbusiness.com action.
Speaker A
Again, that'll be in the show notes, but it's gritngrowthbusiness.com action.
Speaker A
And remember this, cash, clarity and adaptation are your lifelines.
Speaker A
You have the tools now to take action.
Speaker A
It's not about your effort.
Speaker A
It's not about your ideas.
Speaker A
I know you've got that.
Speaker A
You can do this.
Speaker A
Cut those luxuries, protect your core team, and sell your way out of this tough spot.
Speaker A
Keep fighting, keep adapting, and you will come out stronger.
Speaker A
I'm telling you, you can do this.
Speaker A
You've got to grit now.
Speaker A
Let's get to growth.
Speaker A
It's time to get to work.
Speaker A
So I'll see you next week.
Speaker A
I'll be right here back in the trenches with you again next week.
Speaker A
So make sure you join me.
Speaker A
Go.
Speaker A
God bless you.
Speaker A
And you have a great day today.
