Marijuana Business Magazine May-June 2020

Marijuana Business Magazine | May-June 2020 54 M arijuana companies face tough financial decisions in times of crisis. Cash is king when business is good, and it’s even more important when finances are tight. The moves you make now won’t just help you during the current coronavirus-induced economic crisis, they will help you come out the other side stronger and more prepared. Here are some tips for how to keep your financial house in order: UNDERSTAND YOUR CASH FLOW How much money do you need to survive? That is the first question that needs to be answered, according to financial experts consulted by Marijuana Business Daily . Companies “need to take a hard look at business plans in conjunction with financial data and current operations to assess short-term liquidity needs,” said Francisco Colon, a partner with California-based accounting firm MGO. One way to do this is to create a cash- flow budget to project and monitor your cash receipts and disbursements. Doing this weekly “will provide visibility and the information needed to make cash-management decisions,” said Seth Freeman, San Francisco-based se- nior managing director of GlassRatner, a national consulting firm focused on restructuring and distressed situations. OPTIMIZE COSTS If you lack funds to execute your strategy, the logical thing to do is cut costs. But this move must be done strategically in order to minimize the impact on revenue generation, Colon said. Begin by identifying removable costs, such as reducing travel, implementing hiring freezes and limiting discretionary spending. “If there is one silver lining to this pandemic, it is that the virus is already cutting (these) naturally,” Colon said. For example, more employees are working from home, minimizing travel and discretionary spending. Those decisions are the easy ones. Unfortunately, not all of them will be as simple. “Make tough decisions quickly,” Freeman advises. “No manager wants to furlough or lay off employees, cancel services or reduce expenses that had seemed essential prior to the crisis.” That said, making these changes now will give your company more options to hit the ground running when the crisis passes. OPTIMIZE REVENUE Even while market demand is in flux, there are opportunities to drive revenue EDITOR’S NOTE: THIS ITEM IS AN EXCERPT FROM MARIJUANA BUSINESS DAILY’S FREE REPORT, “CRISIS MANAGEMENT IN CANNABIS.”TO DOWNLOAD THE REPORT, VISIT MJBIZDAILY.COM/CRISIS-MANAGEMENT-IN-CANNABIS. House in Order By Jenel Stelton-Holtmeier Finance and accounting experts offer tips on maneuvers to consider in a crisis Get Your Pandemic Pivot