I’d like to share some takeaways a client experienced during an executive coaching session. Perhaps there is something helpful in here for you too?
Executive coaching sessions can range from being very structured to less structured to allow time for business executives to discuss whatever critical issues they may be facing. Aha moments come during both types of coaching sessions.
During a semiweekly call with a business owner client, she shared that for the first time in 14 years, the business was experiencing cash-flow problems. Specifically, they were in their slower season, rapidly approaching the end of their line of credit, and they were carrying unexpected bad debt on their accounts receivable. She described it as a perfect storm.
Are you prepared to weather the storms in your business? Are you doing as much as possible to minimize the severity of potential storms or better yet thwart them to the extent possible?
There are many things that can affect cash flow. Here are just a few things you may want to consider:
- Have you carefully evaluated the payment risk with each client?
- Are your agreements well managed, including having signed contracts, with a clearly defined scope of work?
- Are you collecting retainers before beginning work?
- Is your billing system efficient and reliable?
- Are you regularly and concurrently monitoring your accounts receivable, backlog and available cash?
- Do you have a progressive collection process and is it being consistently followed?
- Do you have a stop work policy for delinquent accounts?
- Do you have a sufficient line of credit?
Don’t think you need a line of credit? Think again, as even stable businesses can become unstable under unexpected conditions.
- Have a sufficient line of credit available and reserve it for operating expenses during fluctuating cash flow periods.
- Avoid using a line of credit for capital expenses or equipment. Instead consider a separate equipment or business loan.
Teach your customers how you expect to be treated.
- Be clear with expectations and then follow through. Clients respect and respond to friendly but firm expectations.
- Avoid becoming complacent, remaining diligent from contract issuance through collection.
Through the process of inquiry, my client was able to recognize opportunities that would improve her company’s cash flow. She shifted from feeling helpless to hopeful and is ready to implement some proactive changes. This is just one example of what a coaching session could lead to. I’d love to be your “thinking partner” during coaching sessions too. Please invite me to share just how.