Navigating bills, uncertainty with the new administration and a shifting economic and consumer landscape can feel overwhelming. Recognizing these challenges is the first step towards building resilience. To help you thrive in the new year, here are some practical tips to maximize your success in uncertain times.
Cash is King
Prioritize cash flow management and cash in bank. When determining this figure, you will want to consider debt, future growth plans and current performance / cash flow. We typically recommend maintaining around two weeks of sales (as a general rule) for cash in bank.
Tax Planning
Work with a tax professional on tax planning and projections. Having projections multiple times a year can help maximize your refund / minimize the obligation. If you owe money, it is important to be sure you have enough cash to cover the obligation (on top of normal reserves).
Bill Pay
Strategically manage bill payments to optimize cash flow. Shift from prepaying or early payments to paying bills as close to their due dates as possible. Always prioritize payroll—your team is the backbone of your business. Focus on reducing high-interest debt first to lower overall borrowing costs, while paying the minimum on low-interest debt during tough times to conserve cash. If necessary, work with lenders to restructure debt, negotiating better terms like reduced interest rates or extended payment schedules to ensure financial sustainability.
Budget
Create both a top and bottom-line budget at the onset of the year and align key metrics to the budget for team members at all levels (i.e. tie bonus and rewards to the goals outlined in the budget to bring the entire team into the picture).
Employee Retention
Focus on employee retention. Reward and recognize those who go above and beyond. This will not only make those who are recognized and/or rewarded feel good but will inspire others to aim high. A little recognition goes a long way. Implement both recruiting and retention bonuses and tie those to key performance metrics of your business.
Lastly, below are some low hanging cost-cutting tips you can implement quickly:
- Find creative ways to increase sales.
- Closely monitor food and labor:
- Reduce food waste as much as possible (make it a competition among the managers, implement a six-month incentive program).
- Power down nonessentials after closing.
- Where/when possible, sensibly adjust menu prices.
- Closely watch your budget/actual each period.
- Consider pausing capex if cash is tight.
Interested in learning? We’re here to help. Contact HORNE Franchise today.
