Cash is the lifeblood of every small business. Without it you can’t pay suppliers, employees and taxes so making sure that you have enough money in the bank is vital to your businesses success. If you are struggling to maintain a steady cash flow, these tips could help. -
Sometimes small businesses can put too much focus on making a sale, rather than getting paid. It is vital that small businesses follow up on their invoices and put pressure on people to pay for the goods and services that have been provided.
Make it easy to pay
Whether you’re selling to businesses or consumers it is vital that you make it as easy to pay for your good and services as possible. This means offering a variety of payment options like cash, BPAY, Bank Transfer or Credit Card. The easier you make it for your customers to pay, the more likely they are to pay on time. -
Properly managing your inventory levels can go a long way towards helping you better manage your cash flow. Having more inventory than necessary not only means your spending more on product than you need to, but also most likely means you’re spending more on storage than is necessary. -
Having a subscription payment is a great way to automate payments and ensures they are coming through on a regular basis. This option can also be more convenient for customers, rather than having to remember to pay a bill it’s automatically deducted from their credit card or bank account. -
Negotiate payment terms
It is always important to have a good relationship with your suppliers. This is especially important if you are struggling with cash flow and are trying to negotiate payment terms. Depending on your situation having a 15 or 30 day period to pay suppliers -
It is usually cheaper in the long run to buy equipment up front, rather than renting or leasing it but if you are struggling with cash flow it’s not always a good idea to pay for expensive equipment up front. Working out a manageable lease or rental agreement will free up cash for other more urgent expenses. -
Some expenses are more important than others, the hard part is figuring out which ones you need to pay right away and which ones you can put on hold. Identifying which expenses are essential for growth and which ones aren’t is a great starting point.