4 ways Houston businesses can recover cash flow in a post-COVID world

Guest column

There's no quick fix to getting back to where you were, but a keen eye and sensible decision-making will ensure you're more prepared than your competitors. Photo via Unsplash

The COVID-19 pandemic has been a cash flow disaster for many businesses, whether it's small restaurants forced to close their doors for months on end or commercial rental properties unable to fill their office space in light of widespread remote working.

Houston, much like many major US cities is facing a big recovery job as the country looks to move on from the worst of the pandemic. While much is to be determined when it comes to what the Delta varient's effect is, businesses are open and the time to think creatively about recovering cash flow is here.

In this article, we'll look at how Houston businesses can get over what was a huge shock and re-evaluate for a post-COVID world.

First things first: Assess the financial damage

Before you can begin to work on a strategy for recovery, your business first needs to assess the financial damage COVID-19 inflicted on it.

There are many different layers to this, which will become more important depending on the size of your business. Start by looking at the hard numbers that define your business (both pre and during the pandemic), such as:

  • Year profit
  • Yearly spend
  • Yearly losses (and expected losses)
  • Employee salaries

There's a chance things aren't quite as bad as you expected. You might have saved on office space through working remotely or have seen an uptick in online customers that represents a revenue shift. This may seem like basic business management, but in a situation such as this, it's easy to ignore the forest for the trees.

Once you've got these numbers in line, you can start to develop a rebuilding plan that relates entirely to your business, rather than cutting and pasting one from another business that is unlikely to have experienced the same issues.

Re-assess your business plan

Chances are, you didn't include a contingency option for a global pandemic in your business plan. No need to panic. If you made it this far, you were obviously a well-structured and organized business. However, to ensure you survive future challenges, it's worth re-assessing your business plan.

Specifically, you need to look at how ready your business is to pivot to the idea of the 'new normal'.

There are many decisions to be made, from top-level finances to employee management to customer service. You may be forced to implement new systems to keep track of your newly remote team, offer subsidies for utility bills to your staff or implement new quality control tests to keep your customers safe and comfortable with your business.

A wider analysis of your industry can be a more effective exercise than looking directly at your plan. Competitors may have innovated in ways you didn't initially think possible. Pay attention to trends and emerging opportunities to mark yourself as a business worth shopping for and working with. Find that profitable niche and see if your business plan can be re-worked around it.

Your business plan will lay bare your business model's strengths and weaknesses in the new world. Don't try and plough through difficult weather with the wrong tyres. Make a simple change, even if it means hard decisions, for the good of your company.

Optimize daily processes and cut out wasteful tasks 

So you've analyzed the damage and re-assessed your business plan for a new set of challenges. Now you can get into the gritty details of making a change.

One of the simplest and most cost-effective ways of getting your business running with a positive cash flow again is to optimize those wasteful daily processes and tasks you and your team get stuck on every day.

Of course, many of these will be unique to your industry and way of doing business, but from invoicing to daily admin tasks, there's so much wasted time every day that could be better spent getting your business back on track.

A few immediate suggestions include:

  • Cutting down on business travel by prioritising virtual meetings and re-thinking how your sales and executive staff travel. Even company cars can become less of a money burden if you take the time to know how to how to save gas (and the money you spend on it)
  • Going paperless and using that printer money to operate through cloud software won't just bring your business into the 21st century, but make daily meetings and employee collaboration more most-effective
  • Using financial trackers to assess your financial situation regularly and automate invoicing, making sure you're always getting paid on time

Monitoring all of this excess spend spillage and ensuring you're on top of emerging problems can be made very simple through time tracking tools. Rather than just a way to keep an eye on remote employees and cut out excessive slacking, Houston businesses can spot which needless tasks are making key employee's life difficult and where budget is being wasted through these (as of March 2020) essential digital tools

.

Consider outside funding options

Last year, we covered how creative thinking in terms of financing can be Houston businesses' path out of COVID financial burden. Since then, much has changed, but many of the methods remain realistic ways businesses of all sizes can recover cash flow.

Unless you went into the pandemic with significant cash to burn, you're likely playing things quite close to the line right now. Without customers through the door and big contracts, you might need working capital to jump-start your recovery.

Fortunately, some great financing options for small businesses have sprung up or gone from strength to strength throughout the COVID rebuilding period. Some of these options include:

Now, not all of these options will work for your business, particularly the ones aimed at small businesses. However, they're all reasonable ways of getting a short-term boost to buy remote office equipment, re-work your business for social distancing to avoid closures or bring in new employees.

The key is not to become reliant on these revenue streams. They should be short jabs to get your business going again, not a consistent fix you should turn to in the event of financial challenges. Borrowing can be both an unhealthy attitude to have and a competitive venture.

Completing these tasks will help you establish a timeline for recovery. No one is quite sure what their business will look like once COVID-19 is completely a thing of the past, but the pandemic should be a lesson that no business can be caught slacking.

The journey to recovery, particularly sorting out your cash flow is full of tiny steps. There's no quick fix to getting back to where you were, but a keen eye and sensible decision-making will ensure you're more prepared than your competitors.

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Kayleigh Alexandra is an entrepreneur and writer at WriterZone and Micro Startups based in the United Kingdom.

What does Houston's tech scene look like from an outsider's perspective? Ripe for success, according to this guest article. Getty Images

Non-Houstonian identifies why the Bayou City is prime for a tech and startup boom

Guest column

Houston might be known abroad as the Space City, but it's got a lot more to offer than interstellar exploration. As we continue toward the second half 2020 — even in light of the COVID-19 crisis, Houston is attracting the best talent, tech, and businesses around — and with good reason.

Here we look at why Houston is such an attractive prospect for enterprise in 2020.

More bang for your buck

While the likes of New York or Los Angeles are established places to launch and grow a business, they are expensive. But in Houston, your important dollar goes a long way.

The cost of living in Houston is around 35 percent lower than in New York. Consequently, cash-strapped but ambitious graduates flock to Houston to enjoy a better (and more affordable) quality of life.

For startups looking to gradually and sustainably grow in their first year (and succeed), Houston is an attractive place to start. They get more bang for their buck, so they can focus on growing their business without paying through the nose for expensive office space (and staff).

It's a beautiful, historic city

Founded in 1836, Houston has a long and rich history, and its aesthetics perfectly represents that — something Houstonians and Texans don't take enough time to recognize usually. Its architecture is a healthy mix of historic and modern.

Downtown Houston features gorgeous old buildings spreading out from Allen's Landing. Its residential architecture too offers some stunning mansions, as well as some rustic row houses. As the city developed throughout history, its skyline has grown to include some breathtaking skyscrapers, including the Heritage Plaza and the JPMorgan Chase Tower — one of the tallest composite buildings in the world.

Looking beyond architecture, Houston offers plenty of green spaces to enjoy. Hermann Park is an impressive 445 acres, and acts as a community space for the entire city. If you want somewhere to run a few miles before heading to work, Memorial Park offers plenty of open space and trails to take advantage of too.

Looks aren't everything, of course. But with the rich sprawl of Houston all around you, they certainly help.

There's a thriving coworking scene

Houston is home to dozens of stellar coworking spaces — with more opening regularly. There's a few WeWork outposts from the Galleria area to The Woodlands, as well as home-grown spaces like The Cannon, Station Houston, and Wicowork, where businesses from virtually every industry come together to work and collaborate.

These spaces form part of a thriving startup scene with plenty of scope for networking and collaborating. Growing a business is easier when you're doing it alongside others, and Houston's coworking spaces offer a fertile ground for meeting and sharing inspiration.

It's not all about established businesses either. Houston is also the perfect place for individuals to launch a creative side hustle, with a thriving scene of artistic self-starters and passionate solopreneurs available to draw upon for inspiration. These coworking spaces provide the perfect place to meet like-minded individuals and get your vision further.

Although COVID-19 has affected coworking spaces, the crisis has pushed coworking to provide virtual resources, which will only benefit coworkers across companies.

Choose from a great pool of talent

Every growing business needs the best and brightest talent to join its ranks and help it succeed. Thankfully, Houston is home to some of the finest universities in the state. The University of Houston and Rice University produce plenty of smart, driven graduates looking to make their mark on the chosen industry.

These universities also have a close relationship with local startups too. Each has its own startup accelerator to help small enterprises get ahead. UH's RED Labs has helped launch dozens of companies since its inception in 2013, and Rice University's OwlSpark has 54 startups to its name to date.

Consequently, plenty of businesses are looking to Houston to seek growth and attract top talent. With such a wide pool of talent on tap, startups and growing businesses alike will have their pick of the crop.

Everything's bigger in Texas, and Houston is no exception. With a growing pool of bright talent, a stellar startup scene, and beautiful surroundings to match, Houston is the top destination for talent and business in 2020.

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Kayleigh Alexandra is an entrepreneur and writer at WriterZone and Micro Startups based in the United Kingdom.

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Houston startup unveils its innovative leather alternative at the rodeo

sustainable fashion

Last month’s Houston Livestock Show and Rodeo stirred up another rootin’ tootin’ time for Houstonians and beyond.

But before the annual event galloped into the sunset, there were quite a few memorable innovations on display, with one notably coming from Rheom Materials.

The Houston-based pioneer of next-generation materials presented its scalable, bio-based alternative known as Shorai, a 93 percent bio-based leather, through two custom, western-inspired outfits that showed off cowboy flair through a sustainable lens.

“I'm a Houstonian, I love the rodeo,” Megan Beck, Rheom’s business development manager, recalls. “We're sitting there talking about it one day and we're like, ‘Okay, we've got to do something with this leather to show people how good it can look in apparel, how easy it is to wear.’”

Buoyed by the idea that their materials are meant to “change your impact, not your life,” Rheom captured the real-life energy of their bio-leather outfits under the rodeo’s neon lights in a short commercial video and photo shoot with models donning the samples, while dancing and enjoying the festivities. Rheom created a skirt, a leather jacket, and then a leather top for the look.

“Houston is such a vibrant city,” Beck says. “There's so much innovation here. I think the rodeo is just a really, really great example of that. And so we wanted to take this opportunity to take some of these garments out there and go on the slide, go on some of the rides, go into the wine garden and go dancing, because if you've ever felt some of the materials in the market in this space, they're very stiff, you can't really move in them, they're a little fragile, they kind of fall apart.”

Not only do the models in the video look fashionable, but they also look comfortable, and the leather looks natural and supple. And to the naked eye, Shorai appears to be like the leather most wearers are accustomed to.

“What we really wanted to showcase in this is the energy and the movement of the leather, and to show people how good it can look in apparel, and how easy it is to wear, which I think we were able to accomplish,” Beck says.

Next up, Beck says Rheom wants to scale production of Shorai, the Japanese word for “future,” at a competitive price point, while also reducing its carbon footprint by 80 percent when compared to synthetic leather. According to Beck, Rheom plans to see Shorai products come to market sometime this year.

“We have companies globally right now that are testing materials, that are prototyping, that are making garments, making handbags and footwear, and making eyewear because we have a plastic, as well,” Beck says. “So, this year, I do believe we'll start seeing those products actually come to market, which is very, very exciting for us.”

And with their large-scale production partner already set up for Shorai, Rheom plans to start its first production run of the product soon.

“In April, we'll actually be starting our first production run,” Beck says. “We'll be doing it at full scale, full width, and a full run of materials. So over the next five years, we're only going to just try to increase that capacity.”

Texas is home to second largest population of millionaires in the U.S.

The Millionaires Club

Tilman Fertitta, Elon Musk, Alice Walton, and Jerry Jones are members of the billionaires club in Texas. But just how many millionaires does the Lone Star State boast?

Altogether, 73,930 Texans were classified as millionaire tax filers in 2022, according to an analysis of IRS data by digital marketing firm Hennessey Digital. (For context, that millionaire count is just a few thousand shy of the entire population of Missouri City.) This figure puts Texas in the No. 2 spot for the country’s biggest population of millionaire taxpayers, behind first-place California.

However, if you crunch the figures a different way, Texas’ millionaire status isn’t quite as impressive, demonstrating that not everything is bigger in Texas. Texas ranks 10th among the states with the highest proportions of millionaire taxpayers, the study indicates. According to Hennessey Digital’s calculations, 27.1 of every 10,000 Texas tax filers reported adjusted gross income of at least $1 million for the 2022 tax year.

“The state’s booming economy, driven by energy, technology, and business-friendly policies, contributes to its wealthy population,” says Hennessey Digital.

Forbes ranked 43 Texans among the 400 wealthiest Americans last year, with Elon Musk topping the list. Houston hospitality king, Rockets owner, and newly appointed ambassador to Italy Tilman Fertitta was the 12th richest Texan and the 99th richest person in the United States, according to Forbes.

Which state comes out on top for the largest share of millionaire taxpayers? Connecticut, with 44.76 millionaire tax filers for every 10,000 filers, the Hennessey study shows. A number of well-to-do Connecticut suburbs are situated just a commuter train ride away from New York City, where bankers, brokers, and others pull in the big bucks. (Connecticut sits two spots above New York state in the millionaire ranking.)

The numbers in the study “highlight the diverse economic landscapes across our nation. States with favorable tax policies and thriving industries tend to attract more high-income earners,” says Jason Hennessey, CEO of Hennessey Digital. “Understanding these patterns can provide valuable insights for businesses and individuals making decisions about where to live, work, or invest.”

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This story originally appeared on our sister site, CultureMap.com.

Remote workers in Houston earn far more than commuters, data shows

by the numbers

In the Houston metro area, it pays to work from home.

Data published recently by the U.S. Census Bureau shows remote workers in the Houston metro earn 40 percent more than their commuting counterparts. For remote workers in the Houston area, median earnings stood at $67,500 in 2023, compared with $48,200 for other workers.

Federal data cited by Visual Capitalist indicates 11.8 percent of the Houston area’s labor pool, or nearly 460,000 people, were remote workers in 2023.

In the Dallas metro area, the difference in median earnings between remote workers and non-remote workers is even more stark. According to Census Bureau data, remote workers there earned $77,000 in 2023 — 50.7 percent more than the $51,100 for traditional workers.

Why the wide gap in pay? The Census Bureau says remote workers are more likely to be older, more likely to be white and less likely to live below the poverty line. All of these traits contribute to higher income.

Among home-based workers in the country’s five biggest metros, median earnings for remote workers were highest in the New York and Chicago areas (over $80,000) and lowest in the Houston area (under $70,000), according to the Census Bureau.

The five-metro comparison also reveals that the Houston area had the highest share (6.8 percent) of all workers, both remote and non-remote, living below the federal poverty level.

In a recent Substack post, urban planner Bill Fulton notes that remote workers in major cities typically earn 50 percent to 80 percent more than other workers do. He declares that “remote workers are far more affluent than everybody else. They are, of course, office workers, not blue-collar or service workers, and they tend to be more highly educated.”
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