Your cash flow is vital for your business. Positive cash flow gives you more liquidity and allows you to run (and grow) your business successfully. Negative cash flow, on the other hand, can cause some serious harm. If you’re looking to boost your business cash flow, here are 6 ways to achieve your goal.
Invoices should be sent out as soon as possible. At the same time, you should encourage your customers to pay on time or early. Late invoice payments can put a serious strain on your cash flow.
Send out reminders a few days before the payment is due, on the due date, and then again after the due date if the payment still hasn’t been made. You can incentive early payments by offering a discount or impose a penalty on those who pay late.
Another option to consider is invoice factoring. With this solution, you can receive funds immediately, instead of waiting until your customers pay. This helps to provide you with the cash flow boost you need right away.
If your current marketing strategies aren’t producing the kinds of results you’d like to see, consider trying something else. In today’s digital world, digital marketing has become a major focus of many businesses. Consider optimizing your website or adding a blog or vlog.
Many businesses are on social media. If you haven’t created a profile for yours (or haven’t updated your profile in a while), now may be the perfect time. For social media to be effective, however, you need to be active on your profiles, engage your followers, and respond to comments and questions.
Take a look at your current products and services and look for ways to add something new. Maybe there’s a product or service you don’t yet offer but that will fit well with what you currently offer. You may also think about unique ways your business can generate additional revenue, such as a seasonal special or renting out a space for parties or other events. Don’t be afraid to get creative.
Do you have inventory in your business that’s not moving? If it’s just sitting there, it’s taking up valuable space that can be used for products that do sell. Avoid ordering (and stocking up on) inventory that doesn’t sell well. Instead, clear out space for the products that do move. This might involve selling slow-moving inventory at a discounted price. You’ll be able to get some money for the inventory and make space for more items that you know your customers will buy.
If you have a good relationship with your vendors, consider asking them for a discount. Many vendors are willing to provide discounts for bulk purchases. Ask to see what kinds of deals you can work out with yours.
If your equipment is old, chances are that it’s not nearly as efficient as it used to be. This can lead to reduced productivity, which can then impact your cash flow. Updating to the latest technology can help to increase your productivity and give your cash flow a boost.
For some, buying new equipment can throttle cash flow, and leave you in a tight spot. To keep your cash flow where it needs to be, you may be able to finance or lease the equipment instead. If you need new equipment, consider all of your options before you buy.
Another option to help increase your cash flow is to look for areas where you can cut costs. Look at your business cash flow statements and determine if your expenses are necessary and if you can reduce how much you pay. For instance, you may be able to reduce energy costs by altering the thermostat settings, take advantage of natural light, and shut off equipment when it’s not in use.
Positive cash flow is essential for running and growing your business successfully. There’s no singular way to boost your cash flow. Try a few strategies and see which ones work best for you.
Publish Date: March 4, 2020 3:57 PM