The top 8 measures against a liquidity bottleneck

The outbreak of the virus is causing the global economy to shake, so that the majority of the population is also aware of this. Business start-ups who have run into payment difficulties due to the collapse in sales are particularly affected. In the worst case, this situation can even lead to the end of the business start-up. But that need not be! Because in order to avoid a liquidity bottleneck and even emerge stronger from the crisis in the end, you need one good preparation and the necessary foresight.

1. Keep calm in the event of a liquidity bottleneck

As a result of the “economic coma”, many founders are currently feeling first-hand what it means to suffer a liquidity bottleneck: their own customers can no longer pay their bills and you have to wait a long time for your money. It also happens that payments are only partially transferred or not transferred at all. As a result, your own liquid funds continue to decrease and you cannot pay the bills that have already accumulated yourself. An apparently hopeless situation for companies in difficulty.

So if start-ups notice that there are problems with liquidity, it is only understandable that they may panic at first. Therefore, the most important measure is to keep calm and accept the situation as it is. This helps to avoid making the wrong decisions. Because it can always be different adjusting screws turn to improve the situation, even if only for a short time.

2. Get an overview with the liquidity plan

Having enough funds is the economic prerequisite for maintaining control and being able to continue to set up a business successfully. An essential tool that shows founders where they stand is the liquidity plan. This is part of the business plan and compares all expected deposits and payments within a specified planning period. Included are cash flows such as B. Social security contributions, wage tax and salary payments. The regular costs such. B. the monthly rent and the fees for various subscriptions are listed in this. In this way, all payments are taken into account stock of money change. Founders can therefore use a liquidity plan to see early on when liquid funds should become scarce and can therefore take countermeasures in good time.

3. Question running costs and set priorities

As part of liquidity management, it should be checked which expenses and running costs are really necessary. Subscriptions, memberships and other expenses that have not been questioned for a long time should now be on their need to be checked. Even if it is not easy, possibilities for reducing personnel costs should also be explored. It is possible that significant savings can already be made here, which will benefit the company’s coffers.

4. Quickly avert a liquidity bottleneck with the sale & leaseback model

If even these savings cannot bring in the necessary capital in the long term and avert an impending liquidity bottleneck, the so-called “sale & leaseback model” (external link) can provide a quick remedy. With this method z. B. Machinery or real estate is sold to a lessor and leased back for immediate use. This has to advantagethat important machines or office space can continue to be used after the sale.

5. Clarifying open receivables helps in the event of a liquidity bottleneck

The outstanding claims must also be taken care of. A longer payment term or partial payment can often be agreed with suppliers or service providers if the invoices cannot be paid on time. Loan agreements with the bank or an extension of the current account line can also help. Furthermore, the payment behavior of customers should also be monitored and documented. Credit checks should also be carried out to avoid customer defaults. If several reminders have already been sent to the customer without success, it is advisable to initiate legal dunning proceedings. However, founders should keep in mind that these options no permanent solutions are to finance the start-up of the company. They only serve to avert or end the impending or existing liquidity bottleneck.

6. With equity measures against the liquidity bottleneck

This should be the last resort to avert a corporate disaster. Founders should only look at equity in absolute terms emergency situations dare. Then z. B. Private withdrawals (cost of living) are reduced to a minimum. Insurance companies should also be checked for potential savings. In addition, savings contributions (building society, etc.) can be temporarily interrupted in order to get the missing amounts together.

7. Check government funding

As an entrepreneur, you don’t have to do everything alone. Fortunately, the German state offers one broad funding landscape. For example, the BAFA support program for companies in difficulty can help small and medium-sized enterprises (SMEs) get back on track when they experience a liquidity shortage. This funding will initially support advice on corporate security. The cause of the company’s economic difficulties is examined and analyzed as to how these can be eliminated. Follow-up counseling can then be used if necessary. Aspects of security advice are deepened and advice is then given on how to eliminate the difficulties. Up to 90% of the costs for such advice are covered. Further information: BAFA funding for management consultancies.

8. Rely on a management consultancy right from the start

A good business situation is no guarantee of future security: that is why a early and medium-term financial planning necessary to remain successful in the long term. This can be created as part of a management consultancy together with a consultant (service: find a consultant/coach). With the BAFA program for companies in difficulty, the costs for such advice are subsidized by the state with up to 90% of the costs. Advice for start-ups can be funded with up to 70% depending on the federal state. Further information can be found here free of charge under “Subsidy check”.