Welcome back for another week of insights brought to you by the team at Atlasview Equity. Our team was recently reflecting on the topic of SMBs & cash flow. For this week’s Atlasview Insights, we decided to share our two cents on some unconventional ways to find cash in a business.

Explore a Partnership With Atlasview Equity

Before we begin, if you are a business owner, deal intermediary, or advisor with a company that could be of interest for a transaction, feel free to reach out. Atlasview has ample dry capital and LP relationships excited to invest alongside us!

Contact Us

We look for the following characteristics in our partner companies:

Industry: Software and tech-enabled businesses
Business Profile: Sticky B2B customer base
Size: Minimum $1m EBITDA or $5m ARR
Geography: The US & Canada

By choosing mountaineering over moonshots, Atlasview takes a disciplined approach to deliver consistent results as we ascend toward each summit with our partners.

5 Unconventional Ways To Find Cash in Your Business

Almost all businesses ‪go through periods of distress where cash becomes very tight. In any distressed situation, cash becomes your business’s lifeline.

There are conventional methods of getting cash into your company, like issuing equity or taking on bank debt. However, for many businesses, these traditional methods may not be an option and therefore you need to look at other ways to generate cash quickly.

This post is going to go through some unconventional ways to generate cash.

Remember, no business ever plans to be distressed, so it’s good to always be prepared. Also, keep in mind, these are mostly temporary or short-term solutions to help you survive a cash crunch.

#1 – Raise Prices

We’ve talked about pricing power in a previous post discussing how it’s an often underleveraged aspect of value creation in business.

Every business has different levels of pricing power, but often time, owners underestimate theirs. Customers, especially loyal ones, will not want to go through the hassle of finding a new supplier over a 10% price increase.

Not to mention, exercising pricing power in the right business can lead to a phenomenal return on investment.

Atlasview Insights

Pricing Power: The Golden Lever of SaaS

Welcome back for another week of insights brought to you by the team at Atlasview Equity. Our team was recently reflecting on the importance of pricing power, an often underleveraged aspect of value creation in business. For this week’s Atlasview Insights…

2 months ago · 11 likes · Atlasview Equity

#2 – Collect Accounts Receivable Faster‬

Take a good look at your accounts receivable aging report. Set up a daily time slot to call accounts that are well overdue and let them know that they will lose their credit terms if they don’t pay ASAP.

You could also offer incentives for accounts that aren’t overdue but willing to pay right away. Something around 1% to 3% would be typical.

#3 – Collect Upfront (COD)‬ or Take A Deposit

Stop extending all credit terms completely. Require all new orders to be paid in full upfront. Let customers know that it’s a temporary measure.

If you’re not comfortable doing this, you can simply take a cash deposit upfront on all new orders. An amount of 10% to 50% of the order value, would be reasonable.

#4 – Pay Accounts Payable Slower‬

You’ve built up a lot of goodwill by paying your vendors on time or early for several years. In a cash-crunch use this to call in some favors.

Communication is key.

Call your vendors ahead of time, and let them know cash is tight and that you’ll be a few days/weeks late. Make them feel comfortable by letting them know it’s temporary, and that you’re actively working on paying them.

#5 – Move Retainers to Contingency

If you’re working with any sort of performance-based professionals or contractors, rather than paying a fixed retainer, pitch them on moving to a contingency arrangement.

Some examples include:

Lawyers – pay them a % of the settlement
Marketing agencies – pay them a % of revenue
Accountants – pay them a % of a tax refund or taxes saved

Entice your vendor by showing them how much money they will earn by agreeing to a continent payment plan versus a fixed retainer. But this will certainly save you some cash in the short term.

Final Thoughts

The key themes in all the strategies listed are communication, negotiation, and thinking outside the box.

Running a business is tough, and cash becomes king when the going gets rough. A few extra days of cash might make the difference between life and death for your business.

Many of these strategies were inspired by the book Corporate Turnaround Artistry by Jeff Sands. We highly recommend this book. Even if your business is nowhere near distressed status, you never know when the tides will turn.

Do you have any short-term cash strategies, that weren’t mentioned here? Reply to this thread and let us know!

A Great Listen for Constellation Enthusiasts

In Collosus’s recent podcast Zack Fuss (Investor, Irenic Capital) and Chris Cerrone (Partner at Akre Capital Management) breakdown Constellation Software. The podcast dives deep into:

Mark Leonard’s genius
Why Constellation is the gold standard for employee compensation plans
How the business has perfected its acquisition engine

It’s a great listen for any fellow deal makers or operators looking to steal a learning or two out of the Constellation playbook. The list of reasons to study Constellation is endless.

On that note- our team recently shared insights from a Mark Leonard (Founder & CEO of Constellation Software keynote speech. You can give it a read:

Atlasview Insights

Dealmaking Lessons From Mark Leonard

Welcome to the first weekly edition of Atlasview Insights. Every Wednesday we’ll be sharing bite-sized insights that are relevant to small business owners, dealmakers, and investors. Whether it’s an industry report or a tweet from a fellow dealmaker, we’ll be sure to share valuable content from across the Atlasview network…

3 months ago · 11 likes · Atlasview Equity

Mark is always pushing boundaries of what is conventional, and frequently using first principles to solve problems in a unique way.

Favorite Business Read from 2022

Lessons From The Titans by Scott Davis, Carter Copeland & Rob Wertheimer

This book profiles several different industrial giants. These are mature businesses that have been through many capital cycles. They’ve all experienced their fair share of trials and tribulations. The profiled companies include GE, Boeing, Danaher, Honeywell, United Technologies, Caterpillar, Roper, Transdigm, Black & Decker, and United Rentals.

Why did we like it?

The authors did a great job of picking out the key lessons that can be applied to any business, including software/technology businesses. Disciplined capital allocation, strict cost controls, continuous improvement, and resilient systems design are all lessons new-aged businesses can learn from old-school titans.

Deal Maker Perspectives

Thomas Ince @thomasince

Do you want to know one of the best feelings in business? Its when you hire someone & they come out of the gate like a rockstar (A Player) Just hired someone 2 weeks ago as a "Business Development Associate" Here are 3️⃣ way you can tell if you hired a A player 🧵👇

Operator Perspectives

The Secret CFO @SecretCFO

The management accounts are the truth serum in a business. They cut through the BS and tell you whether you are winning or losing. Yet most businesses don’t use them properly. Here are 11 principles for great management accounts:

Thanks for tuning in to another edition of Atlasview Insights. We’ll be posting bit-sized content every Wednesday with longer-form pieces going out on a bi-weekly/monthly basis. We have a ton of content lined up for small business owners, deal makers, and investors.

Make sure you subscribe and share with anyone that may be interested.

Subscribe now

Does your firm want to start a newsletter? Get in touch with our marketing team!

Powered by: Deal Bridge Media

About Us

Atlasview Equity is a private equity firm specializing in software and tech-enabled businesses. We combine patient capital with proven operational strategies to deliver predictable results for our stakeholders.

Atlasview Insights

Unconventional Ways To Find Cash in Your…