10 Tricks to Improving Cash Flow
When you own a small business, your cash flow is important. This is how you pay your daily expenses and keep your business running. If you are having trouble keeping it positive, some of these strategies can help.
1. Raise Your Prices
You need to keep your prices competitive or you risk losing customers. However, if you are having trouble making enough of a profit, your prices might be too low. Do some reevaluating and determine if it is time for an increase.
2. Reduce Your Expenses
Sometimes, the problem isn’t how much money you are taking in but how much you are paying out. Examine your current expenses and cut out anything that isn’t necessary.
3. Pay Vendors On Time or Early
Some vendors will offer you a discount for early payments. If this is something your vendors offer, take advantage of it. Try to avoid making late payments or you risk fees and damaged credit.
4. Take Out a Loan
If you need to increase your cash flow right away, applying for a small business loan is an option. This will allow you to get the funds you need fairly quickly.
5. Expand Your Sales Market
If offering new products or services seems like something that would work for your business, it can be a good way to bring in additional income. You can also work on bringing in new customers.
6. Use a Cash-Back Credit Card
A credit card, especially one with cash-back rewards, can be a great tool for your business. You’ll be able to make large purchases with the convenience of monthly payments while making money on it.
7. Send Invoices As Soon As Possible
Payments from your customers are perhaps the best way to keep your cash flow positive. The quicker you send out invoices, the sooner you’ll get those payments.
8. Liquidate Your Inventory
If you have inventory that you no longer need, don’t keep it around. If you’re having trouble selling something, try liquidating it instead to get some quick cash.
9. Send Payment Reminders to Customers
If you’re having trouble getting customers to pay on time, consider sending reminders. It can also help to offer incentives, such as a discount, to those who pay earlier.
10. Keep a Savings Account
It can be difficult to know when you’ll need some extra cash. Opening a savings account for your business will give you something to fall back on, and you can make interest on the money you already have.
Because cash flow is necessary for your business to operate, you should do what you can to keep it positive. Keeping these tips in mind can help.