Previously, I wrote about ways to survive a cash flow crisis in your catering business. I shared two important tips – put off paying you bills and discussing potential loans with your employees.
Along with those two important tactics to help your catering business survive a lack in cash flow. Here are tips three through six. If you’ve exhausted the first two options to no avail, give these a try.
3) Get new suppliers. If you have caught the situation early, and are not behind on your current supplier bills, you may be able to get a few new suppliers with fresh credit lines.
4) Check your receivables and call in favors. Done carefully, you can use this technique to raise cash without damage to your company’s image. When you call the A/P person responsible for your account say, “I need a favor. I am reaching out to my best paying clients because a number of less-than-perfect payers have left me with a temporary problem. Is there any way you guys can pay your invoices a little quicker this month? Believe me, it’s not you, but I do have a problem.” One of my clients sent me this script and he maintained that when used judiciously, it got him out of trouble a number of times.
5) Offer an immediate discount for COD orders. Send out a mass customer email and announce that for one week only, you will take 20 percent off all invoices that are paid COD.
6) Have a sale. Sell box lunches for $7.50 instead of $8.50 if the orders are prepaid.
A combination of the above measures should take some of the pressure off during a catering cash flow crisis. If you still are in trouble, you can consider borrowing money from other sources. As we all know, restaurants and caterers are generally unloved by standard banking institutions, and you probably won’t get very far telling your sad story to the neighborhood banker.
Michael Rosman is founder of The Corporate Caterer, a membership website, training and consulting company for caterers and restaurateurs and who want to launch, or grow their corporate drop-off catering business. Michael has over thirty years of experience in the industry and has built an almost two million dollar a year corporate drop-off catering operation from the ground up. Michael can be reached directly at: [email protected].
