When you have a small business, cash flow can be something that can make or break your business. If there are problems, it can lead to debt, paying interest, and even not being able to pay for your staff. So having a solid cash flow really is of importance. Being able to improve cash flow means having a cash flow forecast that is up to date, as well as reliable. This can provide you with the information that you need to stop the cash flow problems being an issue. So here are some of the ways that you as the business manager can improve the cash flow and keep your business thriving and growing.
- Cutting costs is one of the number one things that you can do to help to improve cash flow. And when you break it down, each and every business can look for things that they don’t really need to be spending on, or the non-essential things that they are buying or spending. Businesses can take some drastic actions to help to cut overheads and reduce other costs. This can immediately free up cash flow.
- Selling assets is also another thing that you can do, provided that the sale of them won’t impact the business too heavily. So say, for example, your business is in construction and you have quite a bit of equipment that you have already bought. Could it be more cost-efficient for your business to sell some of the items that you have, meaning that you have cash up front, but then you rent out items that you need, such as excavator hire, and so on? Having a monthly payment will help you to know what you need in each month, and you’ll have the upfront cash that comes with selling the things that you don’t really need to own.
- If you have big plans to expand your business, then you might want to rethink things if you are having problems with your cash flow. Many big cash problems will happen when a business does want to expand. That could be a new line of products or new offices or shops. But if you are having cash issues, then the only real thing to do could be by delaying these kinds of expansions, or by cutting down the size of the expansion for the time being.
- If you are in need of payments sooner than the due by date, then could you think about offering the people that owe you money, a discount for early payment? Yes, you will take a slight hit, but you will be able to have the cash sooner, so that you can make plans accordingly. It can really help so is definitely worth considering if clients paying on time is a problem for you and your business.
- Delaying payments to clients can be a bit of a risky game, but it is something that happens in business from time to time. If you take a little longer to pay the bills that are owed to you, then your business could reduce cash flow problems. It can e at the risk of damaging a relationship with your suppliers, though, so it may only be something that should be done in desperate times.
Want to learn more?
We’re here to help you to take action just like we’ve helped thousands of other entrepreneurs, business owers and creative professionals all around the globe.
Now is the time to let your passion SHINE.
Now is the time to Make Tomorrow Today!
To your success,
Vinh Van Lam & Stuart Horrex