A Checklist for Extending Your Cash Runway During a Economic Recession

Business ebbs and flows are a fact of life. It’s like riding a wave; you want to accept the flows and find the best ways to deal with the ebbs.

Lydia Stone has more than 20 years of experience building and leading accounting organisations. She managed IPO, primary and secondary financing transactions, M&A, and full range public company accounting operations, including accounting, financial reporting, tax, treasury, financial systems and audit functions.

Stone previously held the roles of chief accounting officer for Blackboard and Evolent Health, and various leadership roles in BAE systems and Ernst & Young LLP. She currently serves as chief accounting officer at Chargebee.

Here she shares five ways to extend a cash runway.

Slowdowns can be worrisome if you are a small or relatively new business with a low cash reserve. Businesses should continuously plan for the long term and anticipate possible downturns. If a downturn turns into reality, companies should respond with careful planning and not lose sight of their long-term goal.

The word ‘recession’ instantly tightens purse strings, and while frugality is prudent in our current climate, it’s imperative to remain cognisant of the bigger picture.

Extending your cash runway is not just cutting down on non-essential expenditure but a strategic exercise; you want to trim the fat without cutting into your revenue engines that fuel sustainable growth.

So experiment, innovate, and stand out.

It’s ideal to have at least a 24-month runway ahead of you. Here are some ways you can extend your cash runway.

-Analyse your market and think outside the box
-Retain existing customers
-Plug revenue leakages
-Scenario planning
-Invest in data analytics and build data literacy