Close up shot of hands of master brewer with barley seeds. Employee examining the barley at brewery factory.

Managing your craft brewery’s cash flow amid economic uncertainty

Managing your craft brewery’s cash flow amid economic uncertainty

Synopsis
3 Minute Read

Careful analysis and control make improving cash flow possible despite difficult and unpredictable times.

Effectively managing cash flow is a challenge for the most successful businesses, especially during times of high interest rates, increasing input costs, and changing consumer demands.

If you’re struggling to pay the bills, are having difficulty securing financing, or are seeing your debt and interest payment increase beyond your ability to repay, it’s time to transform how you manage your cash flow.

When approaching cash flow management, there are some key things to consider when assessing if a problem exists in your craft brewery and how to right the ship to ensure long-term success.

Ways to improve cash flow management

Forecasting and trends

Especially during economic uncertainty, using valuable data to assess how the market is doing, where it’s going, and how your brewery fits into that, will enable you to better approach decision making.

Accurate financial forecasting is crucial to allowing you to predict future cash flow based on sales trends, production costs, and market conditions.

Knowing your brewery’s trends can also go a long way to effectively managing cash flow. Make sure you have what you need heading into slow times or seasons and be prepared to ramp up quickly when business picks back up. Is your profitability consistent or is there frequent change? If you have plans for an expansion or other big project, do you have sufficient cash flow to allow for that?

Supply chain management

Optimize your supply chain for efficiency by collaborating with suppliers for cost-effective and appropriately timed inventory management to prevent overproduction and excess inventory.

Especially during times of economic turbulence, have a plan in place for potential supply chain disruptions that could impact production. Having backup suppliers or alternative sourcing strategies can help maintain operations and cash flow during challenging situations.

Pricing and margin flexibility

Depending on demand and competition, you’ll need to be willing to adapt pricing to maintain healthy and sustainable profit margins.

Closely monitoring market conditions will help you understand how extenuating circumstances can affect customer behaviour, preferences, and demand.

By consistently evaluating your cost structure you can identify areas where cost savings can be achieved without compromising the quality of your product.

Marketing and operational analytics

Understanding market trends are invaluable in helping you see how consumer needs and demands are changing and put you in a position to capitalize on that information.

Whether it means adding or removing a certain product from your offerings, advertising or operating in a certain geographic location, or marketing in a specific way to bring in more customers, using data to adjust your systems and processes regularly is key.

Ultimately, prioritizing financial planning and flexibility starts with a deep understanding of your business. Navigating the market and the challenges within it has never been a more demanding task for craft brewers but planning for the unpredictable goes a long way.

Managing cash flow will look different for every craft brewery but with the help of an experienced MNP advisor, you can gain peace of mind knowing that you’re working to future-proof your business.

To learn more about the work MNP’s Craft Breweries team does, visit our page.

Insights

  • Performance

    May 23, 2024

    Preparing Taxes 101: Claiming GST / HST

    Is your business able to claim the input tax credit on GST/HST? Discover who can make a claim, how to meet the conditions, and what expenses are eligible.

  • Progress

    May 22, 2024

    Is your family prepared for the unexpected?

    Is your family prepared for the unexpected? Learn how building a serious illness plan can provide continuity for your business and your family.

  • Confidence

    May 21, 2024

    How construction companies can overcome the pain points of an ERP implementation

    Implementing an ERP system in the construction industry offers plenty of benefits — but it’s not without its challenges.