Cash flow is always a critical part of a retail business. Having funds available to spend on stock, utilities and other bills relies on keeping money flowing in. But we find ourselves in a particularly challenging time right now, where the shopping experience is changing dramatically and so too is customer shopping behaviour.


Cash flow may be a concern for many retail businesses in the coming months. So, if you find yourself with a cash flow challenge, what action can you take to mitigate this and come out the other side? Here are a few suggestions:

1. Talk with your suppliers

Probably the biggest single thing you can do is talk to your suppliers and talk to them early. The majority of suppliers will likely be willing to adjust their terms or agree a part payment or delayed payment for outstanding invoices. They would almost certainly rather receive something and help keep you afloat to purchase more in the future, than lose out entirely should your business go under.

Communication is key here – don’t leave it too late to talk to your suppliers, let them know as soon as you can see you may have a cash flow issue and see what they may be able to do to assist.

2. Cut expenditure where possible

Removing any unnecessary expenses, or reducing expenses wherever you can, will help buy you more time. Ultimately, this may unfortunately lead to losing non-critical staff members, but cost-cutting also could include negotiating on service charges and/or seeking out better deals (e.g. on business insurance, energy bills etc).

Identify outgoings that are not mission critical and see where you may be able to reduce these – see this list for some ideas of expenses that you may be able to reduce or eliminate altogether.

3. Raise capital or look at loans

It may be that you feel you need a cash injection to get you through, in which case there are a couple of options. You could sell some equity in your business and possibly take on a business partner. Some people may be reluctant give away a chunk of their hard-earned business, but it can also be a benefit if you choose the right partner – as their connections and experience could be a great benefit.

You could also look at taking out a loan. In the personal finance world, many people look to emergency loans to get them through when an unexpected but necessary bill or expense crops up. So, in the same way, retail businesses may look to take out a business loan to see them through – although this should be carefully considered to ensure that the repayments can be made.

4. Crowdfund

This may not work for every retailer, but a modern method of raising money quickly is through crowdfunding. If you have a loyal customer base, you can offer perks in exchange for a donation to reach your target funding goal. These perks would ideally be things that the customer would not normally be able to get but that are low cost to you.

For example, you could offer personalised items, VIP access to the store without other shoppers, or even just a public acknowledgement of thanks for contributing may be enough for some customers to provide a small donation if it means that they are helping you stay in business. A couple of popular crowdfunding sites include IndieGoGo and Go Fund Me.