Tight Cash Flow and Rising Inflation? Here’s How to Keep Moving Forward with Fix This Next

As the year winds down, I know that inflation and tight cash flow are on your mind. 

You’re not alone in this. In tough times, it’s normal for business owners to feel pulled in every direction, and the pressure can make it feel like the only way forward is to push harder and do more. More marketing. More sales. Just scrambling for cash.

But here’s where I’ve learned that having clarity on the most vital need in your business – the one area that truly demands your focus – makes a world of difference.

Facing inflation and cash flow struggles: Why knowing your vital need is key

With costs rising and cash flow squeezed, it’s easy to feel lost in the day-to-day battle of simply covering expenses. And while inflation is affecting everyone, each business feels it differently – whether it’s on your materials costs, payroll, or those dreaded fixed overheads.

By drilling down to identify your business’s most critical area of need, you can make strategic moves that alleviate the strain right now. This isn’t about a random checklist of tasks; it’s about finding out where your focus should be based on what your business needs most. Start by using the Business Priority Pyramid (BPP).

As you can see, it starts with sales and profit and moves up to order, impact, and legacy. Where you focus today depends on your business’s current situation, and FTN helps guide you to take that first step with purpose, not panic.

Step 1: Cash flow struggles? Start with your profitability

Let’s face it: when cash flow is tight, one of the most effective places to focus is on profit. Inflation drives up the cost of almost everything, which can chip away at margins if we’re not mindful of it. Here are a few areas to look at:

• Evaluate your pricing strategy: Are there adjustments you can make that don’t drive customers away but can offset the cost increases?
• Identify high-margin products or services: Focus on what provides the highest return without dramatically increasing expenses.
• Cut unnecessary costs: Take a hard look at those small expenses that add up, but don’t contribute directly to growth.

Step 2: Streamlining operations with order

Once you have a handle on cash flow and profitability, the next layer is operational efficiency. Inflation and tight cash flow often expose weaknesses in how we operate daily. Maybe it’s supply chain delays, inefficiencies in production, or high expenses from redundant processes, this is an area where small changes can have a big impact.

By focusing on order in the BPP, you can streamline processes to ensure every dollar counts. This can mean:

• Automating tasks: Look for repetitive processes that could be streamlined or automated, freeing up resources.
• Improving vendor relations: Negotiating better rates or finding more affordable vendors can provide immediate savings.
• Cross-training teams: Cross-training can ensure your team is agile and can cover critical areas without additional hires, which can be especially valuable in times of tight budgets.

Step 3: Prioritizing impact over expansion

When cash flow is stretched, the focus isn’t on expanding but on solidifying what’s working. This is where the impact layer of the BPP helps – by showing you where you’re already making a difference with your customers and where your value is the strongest. In tough times, reinforcing those core connections can not only stabilize your cash flow but also set you up for stronger growth in the future.

Instead of spreading yourself thin, think about:

• Strengthening customer relationships: Reach out, connect, and make sure your customers feel valued. This can pay off in loyalty, referrals, and sustained revenue.
• Doubling down on what works: Cut any unnecessary marketing or product launches, and focus on what’s already driving success.

Moving forward with clarity into next year

I know that inflation, tight cash flow, and the pressures of ending the year can make it feel impossible to plan for next year. But Fix This Next gives you a roadmap to manage the now and set yourself up for a better tomorrow. By focusing on the most vital need in your business, you can not only ease today’s cash flow pain but also create stability that prepares you for what’s next.

Let’s get through this last quarter together, with intention, not just reaction.

Hang in there- you’ve got this!

– Mike

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