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Moving ahead: earning liquidity
When liquidity is scarce it needs to be managed carefully.
Today, after years of being spoiled by easy credit, we’re seeing liquidity dry up in many sectors. Now more than ever, we have to take deliberate to generate liquidity for further investment. There are ways and means.
Site sponsor MonkeyMedia Software wants to prosper with our customers and prospective customers. We are sharing here what we’re applying to ourselves: making improvements in the ‘little things’ will help make things a little better. And they’re all little things. Our resident Bakery expert, Dan Ettling expands on these themes with his recent feature article What To Do When The Market Changes.
Dan looks at things from a baker’s point of view. Much of what he writes applies to the QSR and Fast Casual markets as well, including:
Rework production to control costs: an initial key to survival, and can free up some capital.
Other costs, such as laundry services, energy waste and long distance charges can also uncover hidden unnecessary losses.
Labor is probably our biggest investment. Are your employees motivated and disciplined, or are they waiting for a miracle to happen? Both your customer facing employees and production people hold keys to your situation, so take a good look. As the labor market softens, consider reviewing how you do things, including your use of overtime.
The market has changed. Are you serving the right market? Some recent news indicates that cheap eats are in bigger demand than ever. However, this does not mean that all the opportunities are down market.
With good judgment, hard work and a little luck, significant capital can be set aside for investment. Being able to expand & adapt to the contours of new demand is what liquidity can do for us; investment can take the form of new equipment, an extra shift, or a new business line that diversifies your risk. As you implement, check metrics as you go.
The flow of things may not seem conducive to earning money investment, but in times like these, the companies that transform effectively, win.
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