Whether you’re just starting out or you’ve been in business for years, increasing your cash flow can open up many opportunities for your company.
Cash flow is like the circulatory system for any business. Poorly managed processes or poorly considered policies may end up clogging funds and preventing them from freely flowing through a business. If these cash flow issues aren’t corrected, it could end up causing serious financial damage to the organization.
Perhaps you are a business just starting out and you are probably carefully considering things like furnishings, office space, employees and infrastructure that all require funds. On the other hand, business that have been around for a while are likely to face opportunities to expand, requiring a steady cash flow to execute that growth. In both cases, good cash flow is crucial.
As you contemplate ways to increase your own cash flow, it is important to look at both top and bottom line strategies. Your efforts to both increase sales and reduce costs will have a positive impact no matter what stage your business is currently in. Below are 5 easy and creative ways to increase your cash flow in a matter of weeks.
5 Ways To Increase Your Small Business Cash Flow In Weeks
1. Re-Negotiate Your Payment Terms: Look at how your current payment terms perform on an overall basis and look for ways to shorten the time it takes you to get paid by clients. For example, you could:
- Offer early payment incentives or get deposits on contract work
- When ready to announce a price increase, offer options for clients to pre-pay at the current rate
- If you are a product based business, look at quantity pricing and incentivize larger quantity buys, or clear out old inventory at reduced “pay now” prices.
2. Use Contract or Professional Services: You can reduce payroll and capital investment by contracting with a third-party service provider. For instance, outsourcing your business phone answering to a reliable call center provider can greatly reduce your costs, with the added benefit of freeing your time to be better spent focusing on growing your business. Virtual receptionists have been growing in popularity, and you could be paying pennies on the dollar when compared to hiring a full time employee.
3. Change Your Marketing Strategy: Consider switching from paid marketing to content driven marketing. By using the power of social media, blogs and eBooks you will make your web presence a treasure trove of information for your existing and future customers. You’ll gain their loyalty by adding value in simple ways via consistently sharing your knowledge. Start by outlining a strategy and define where you want to take it, then fill in each stage with appropriate content.
4. Sell Unused or Obsolete Equipment and Furnishings: This may seem like a small, short term step, but it can net you a decent amount of money with little effort. Do you have a back room or storage unit with equipment and furnishings that “maybe” will get used again? If they’ve been collecting dust for a year or more, it is probably time to part with them. List them on any number of free posting sites and generate cash, while cleaning out your space at the same time. Think of it as a garage sale for your business.
5. Borrow Strategically: Gain control over your cash flow by utilizing a business credit card and/or line of credit for all expenses in your business, allowing you to pay it off when you get paid. These tools allow YOU to take advantage of suppliers’ offers of up-front discounts or bulk purchases, bringing those savings to your bottom line.
By putting in a little effort now, you can realize on-going cost savings with these cash flow enhancement strategies. Continue to examine your cash flow management efforts as your business grows to make sure it is efficient and serving the changing needs of your company.