An event company’s cash flow is one of the most important parts of a business, but recently, the COVID-19 pandemic hit the event rental industry, and with more punch than it hit others. Like dominoes, big events and gatherings were cancelled or postponed, and smaller ones soon followed suit. However, regardless of the source of the crisis or issue, uncertainty will always be a variable in our lives, our businesses, and the economy. Therefore, it’s a good idea to be proactive with solutions and create contingency plans, should similar disruptions occur in the future (which they will!). Learn how to create cash flow when inquiries stop, events are postponed, and worse yet, orders are cancelled.
Understanding how to help your event rental company’s cash flow amidst a pandemic:
- Maintaining current orders for your company’s cash flows.
- Keep cash flowing in with eGift Cards.
- Offer incentives for advanced event bookings.
- Utilize talent with alternative sources of income.
Let’s dive in:
Maintaining Current Orders for an Event Company’s Cash Flow
Not only are we party rental companies in the midst of panicking people who are ceasing almost all forms of contact; some are confronting even more difficulties with clients seeking cancellations. Before you agree to this, be sure to check the language of your contract and if there are any excuses for performance on either end. If you have an impossibility clause, a force majeure provision, or something else, see if the restrictions in your area are making it impossible to perform. Read more about the implications of COVID-19 on your contracts here.
Furthermore, one thing you can do is offer the alternative of postponement, which means you can perform in the future. Before this, however, allow your client to express their fears and frustrations, listen to them, and respond with compassion and respect. Don’t forget long term about your reputation and how you treat your customers. A little goodwill goes a long way.
It is within the event rental company’s discretion how to handle the parameters of postponement:
- Can the order be converted to a credit with a one year limitation with no penalties? Or longer?
- Notify customers if their event conflicts with existing events on the books in the near and distant future.
- Are you flexible where the monies can be redirected? For example, can it be applied to different rentals and services like delivery and installation and so forth, but in the future?
What works best for your event business may not work best for others, so employ your best judgment. Make sure the new contract has the appropriate date listed and not the old one with an old payment schedule. Goodshuffle Pro is a lifesaver when it comes to flagging scheduling with its handy-dandy stop signs and making you resolve any possible conflicts. You can also easily edit orders and resend to clients. Don’t forget Goodshuffle Pro syncs with Google Calendar so you can view your events this way, as well as on the Dashboard.
Another option to help keep cash flow coming in is to offer gift cards. Some vendors are already starting this practice as a way to stimulate cash flow – this keeps you on customers’ minds and builds confidence in your business and brand. You can always apply that amount to your contract under the Billing tab in Goodshuffle Pro (learn more specifics here).
You can even ensure this syncs to your Quickbooks for your accounting and leave info in the Notes section, such as “Gift Card” and any other details about it, including notes to send them flowers, or thank you notes for investing in you and believing in your business. There are programs available like Giftly or Jotform where you can create a gift card system and have the gift cards available online.
Incentives for Advanced Bookings
Other vendors are offering special discounts in response to the crisis to stay on clients’ minds, create goodwill, and increase revenue. Many restaurants are offering this even for delivery to stimulate cash flow. We could learn a thing or two from these businesses about pivoting. You should also define parameters of the discount by asking yourself:
- Does this apply to rentals only?
- Is this a one-time deal?
- Does the offer expire?
- Is this only for new customers?
- Are there any incentives for repeat customers, so they feel valued for their loyalty too?
Alternative Sources of Income
You have heard about diversifying your investments, and this should also apply for event companies’ cash flows as well. We already endure a high level of risk in rentals – relying purely on rentals may not be enough in the event of a disaster or crisis.
Are you a good writer? Do you keep up with your own blog? If you have a good relationship with other reputable blogs, you might want to pitch writing articles for them. Goodshuffle Pro is a great company to do freelance writing for. They love hearing advice from those of us in the industry. Aside from writing, there are other streams of income you will have to create to sustain short- and long-term. Take some time to think clearly and come up with some solutions. Start brainstorming and jot down some ideas, such as:
- Design services
- Planning, once that ramps up again
- Or, maybe you pivot and your staff can temporarily become a moving company, provided it’s safe
More than ever, now is the time to get creative to increase your event company’s cash flow. This will bring out a stronger side of you and your business that you didn’t know existed. There will be some available opportunities, and some you’ll have to create yourself. While COVID-19 is taking the events industry by storm, it’s also revealing the true strength of event professionals. We’re all in this together.