In business, even if you are doing really well, you can’t afford to take your eye off the cash flow ball for even one second because companies can be hit with financial difficulties at any time – often without warning. Even just a minor slip in your company’s efficiency or slight dip in sales can send you on a downward spiral if you are not careful, and that means that whoever you are, whatever your busienss does, you need to be constantly improving your cash flow. Here are a few things you can do to that end…
Lease Instead of Buying
Although leasing – which you can find out more about at https://fitsmallbusiness.com/equipment-leasing/– can sometimes be more expensive than buying outright, depending on the equipment your company requires, at least when you’re thinking just in terms of the bottom line, it can often be the better way to go about things. Why? Because if you’re a smaller business with less capital to play with, you will need to maintain that equipment, repair it and quite often replacer it after just a few years too. This could eat up all of your cash and throw your finances out of whack. However, if you are leasing, the company you rent from will be the ones responsible for taking care of that stuff.
Offer Discounts on Invoices
If you offer discounts to clients who settle their bills as soon as possible, they are much more likely to pay in a timely manner, which means you are far less likely to suffer from cash flow problems.
Credit Check Clients
If you’re offering a service which does not require your clients to pay at the point of sale, it is very sensible to credit check them before you conduct any work/hand over any goods. There are few things worse for your cash flow than customers who cannot and will not pay and although this will not eradicate the problem completely, it will vastly minimize it if implemented correctly.
Open a Line of Credit
Opening a line of credit with a company like businesslineof.credit is a great way to ensure that, if despite your best efforts, something does crop up such as an unusually large expense or a temporary stall in sales, you can keep your business afloat. Even if times are good and you have little need for it, knowing it’s there when you do need it will give you peace of mind and ensure that you can act swiftly.
Form a Cooperative for Buying
Finding companies similar to your own who need to purchase similar supplies is a great way of saving money and boosting your cash flow because you can club together, buy in bulk and benefit from the discounts that come with larger purchases.It just plain makes sense.
If you have stock that just seems to sit in your inventory never being purchased, then it is taking up valuable space and resources and you would be better off selling it. Sure, it might hurt to have to sell stuff for a discount, but chances are you’d never sell it at full price anyway, and you can free up space for lines that will do well and make you money.
Do you run a business? Do you have any tips for improving cash flow?