Challenge: Improve cash flow in 90 days

In an increasingly competitive economic environment, improving cash flow is a major challenge for companies. It is a measure of a company's ability to generate funds from its operations, excluding external financing. The aim of this article is to guide you through a four-step process to improve your cash flow in 90 days.

Step 1: Understanding cash flow

Cash flow is a financial indicator that measures a company's ability to generate cash from operating activities. It is calculated by subtracting cost of goods sold and operating expenses from sales. The higher your cash flow, the more profitable your business. Understanding this indicator is essential to making informed financial decisions and implementing effective strategies. It's the first step towards improving your margin.

It should be noted, however, that cash flow can vary according to a number of factors, such as the company's cost structure, pricing strategy and sales volume, among others. It is therefore crucial to analyze these factors to identify levers for improvement.

Step 2: Identify the levers to improve your Margin

Once you have a good understanding of cash flow, the next step is to identify the levers for improving it. These levers can be internal, such as optimizing production costs and operating expenses, or external, such as increasing sales prices.

Cost optimization can involve measures such as improving production efficiency, reducing waste, or negotiating better contracts with suppliers. On the other hand, increasing sales prices can be achieved by improving product quality or developing a strong branding strategy.

Step 3: Implement effective strategies

Once you've identified the levers for improvement, the next step is to implement effective strategies. This may involve setting up new production processes, renegotiating contracts with suppliers, or implementing a new pricing strategy.

This requires careful planning and effective management. It is also crucial to clearly communicate these changes to all members of the company, to ensure their commitment and support.

Step 4: Monitor and adjust your 90-day action plan

Finally, it is essential to monitor and adjust your action plan according to the results obtained. This means regularly measuring your cash flow and analyzing the effects of the various strategies implemented.

If the results don't live up to your expectations, you may need to adjust your action plan. This may involve modifying your strategies, revising your objectives, or rethinking your approach. Follow-up and adjustment are key steps in ensuring the success of your action plan.

Improving cash flow is a challenge, but with a clear understanding of this indicator, identification of the levers for improvement, implementation of effective strategies and regular monitoring, you can meet this challenge successfully.

Remember: the road to improvement is a journey, not a destination. Every step you take to improve your cash flow is a step toward your company's success. So take up the challenge and improve your cash flow in 90 days!

Action list taking less than 2 hours a day (3×30 days)

As a reminder, here's a list of simple actions to perform every 30 days to double your MBA in 90 days. Need help? Consider a 24PM coaching plan to make it easier.

Day 1: Quick audit of fixed costs.
Day 2: Analysis of variable costs.
Day 3: Evaluation of supplier contracts.
Day 4: Search for alternative suppliers.
Day 5: Training in a negotiation technique.
Day 6: Negotiating with a key supplier.
Day 7: Implementation of a productivity monitoring tool.
Day 8: Training on the productivity tracking tool.
Day 9: Analysis of productivity data collected.
Day 10: Identifying production bottlenecks.
Day 11: Planning an innovation brainstorming session.
Day 12: Brainstorming for process improvement.
Day 13: Developing a competitive pricing strategy.
Day 14: Testing a new pricing structure.
Day 15: Analysis of sales and customer returns.
Day 16: Review of customer credit policies.
Day 17: Inventory management training.
Day 18: Audit of current stock levels.
Day 19: Planning a just-in-time inventory strategy.
Day 20: Partial implementation of stock strategy.
Day 21: Evaluation of savings achieved with the stock strategy.
Day 22: Identifying unprofitable processes.
Day 23: Drawing up a plan to eliminate waste.
Day 24: Implementing measures to reduce waste.
Day 25: Training in the use of budgeting software.
Day 26: Creating a simplified budget forecast.
Day 27: Sales forecast variance analysis.
Day 28: Adjustment of cash flow forecasts.
Day 29: Meeting with sales team to discuss objectives.
Day 30: Establishing key performance indicators (KPIs).