Maintaining a consistent cash flow is critical if you want your business to succeed and maximize its potential. Over 21 percent of companies fail within a year of opening, and a lack of small business cash flow is a common culprit. Generating business sales is a recipe for success, but you should do some things to speed up your cash flow and get that money into your account.
Managing your business finances and organizing documents will help you track your incoming and outgoing money. Still, more is needed to improve cash flow, especially if you’re new to running a company.
Luckily, you’ve discovered this insightful guide to the best tips and strategies for boosting your company’s cash flow and expanding operations. Continue reading to learn about improving your cash flow and making your business sustainable today!
Send Invoices ASAP
Sending invoices as soon as the transaction occurs is the best way to maintain a steady cash flow for your business. Sales are the lifeblood of your small business, and your clients will only pay you if you send them the invoice for your goods or services. The sooner you send customers your invoices, the sooner you’ll have cash coming in.
If it’s time-consuming to create invoices, look at options to upgrade your invoice processing. Several software programs are designed to help small businesses invoice customers and receive business finances. Take your invoicing to a new level and improve your cash flow.
Follow Up on Invoices
Another mistake many small businesses make with money management is failing to follow up on customer invoices. Following up with customers puts pressure on them to pay what they owe you for your goods or services. Send an email reminder a few days after the transaction is processed.
Send another follow-up email or call the customer when the invoice is due. Follow up again in a few days if the deadline passes with no money collected. The best software programs for invoicing have automatic follow-ups included with the service.
Giving customers incentives is another effective way to speed up money collection and improve cash flow. Offer small discounts to customers who pay their invoices off within a week of receiving them. You’ll get your money sooner and enjoy better relationships with your clients.
Increase Your Prices
Increasing your prices is an effective way to improve cash flow for your business and boost your profit margin. Look at the prices your competitors charge when setting your own to determine if you’re setting prices too low. Look at equipment and inventory prices to decide if the time is right to raise your prices.
Determining if your prices include the time and work put into your services is vital. Selling yourself short will result in stunted cash flow and poor money management.
Don’t risk putting your business in the red for fear of raising prices. Consider accounts receivable financing linked here to make ends meet.
Expand Your Market
If your cash flow is falling off, consider expanding your market to generate new business sales. Get together with your managers and brainstorm for new product or service ideas. Look at the services and products you’re offering and find things you can offer that provide additional value to your customers.
Your auto repair business could offer detailing and window tinting services in addition to repairs. Allow the creative juices to flow when expanding your market and services.
A new marketing strategy could also help you improve the cash flow of your business. Assessing your marketing strategy is essential to ensure you reach your intended audience with a message that resonates with them.
Social media is an excellent marketing medium that won’t cost your business a dime. Starting a blog page on your website and using SEO principles will also help you generate organic web traffic. It’s an effective way to improve your business sales.
Talk to Suppliers
Working with your suppliers is critical to secure better prices when purchasing goods in bulk. Buying inventory is essential for success, but you could see a diminished cash flow if you overpay your suppliers. Work with them to secure wholesale prices and watch your cash flow soar.
It’s also worth trying to negotiate better credit terms with any long-term vendors you have a history with. You could secure other discounts that allow your money to go further.
Use a Small Business Loan
You can also work with a lender to take out a small business loan and boost your cash flow. A short-term business loan provides a lump sum of money you can use to expand your business or invest in new products. You’ll pay what you owe to the lender over a specified period in installments.
A line of credit is also beneficial when running a business. The lender will provide a credit max and allow you to pull money out as needed. You’ll only make payments on the money you pull out of the account.
It’s one of the most effective ways to expand your business and purchase new inventory. You’ll also have emergency cash to cover any unexpected expenses.
Use Electronic Payments
Electronic payment options boost efficiency and convenience for you and your customers. You can wait until the morning the payment is due to pay what you owe.
Business credit cards are also worth exploring if you want to take advantage of a grace period to boost cash flow. You could enjoy cash-back perks that help you make your money go further.
Take Steps to Improve Cash Flow Today
Understanding the steps you should take to improve cash flow for your business could make or break your operations. Electronic payments and an efficient invoicing system will help you get the money you’re owed quicker. Work with suppliers to secure bulk pricing and discounts, and consider using a small business loan to expand your operations.
Are you ready to crank your marketing and business cash flow up a notch? Read more of our business and marketing blog content to gain an advantage over the competition