Cash flow is very important for a business no matter how small or big it is. Every business owners always look for opportunities to squeeze cash from to carry out business operations smoothly. In the business world cash is the diamond. You can hope for great return in the next three months but you need to have sufficient cash flow to cover your business expenses during that period. Here are the simple tips to follow to improve your cash flow.
Cash Flow Forecast
Think and create a chart drawing up a list of the payments that you must make over the next year which includes wages, rent, stock, loan repayment and so on. Then you should list about the money that will come into the business which may include customer payments, interest on savings, shareholder investments and tax returns. Finally it is necessary to take away the expenditures from the income to find the money you will be actually left with.
With this information you can look for more strategies, change plans according to your requirements, make purchases or invest on recruitment, marketing, loans and others. In a nutshell forecasting is actually a very helpful and systematic way to determine the cash flow predicting peaks and downs. It also highlights the cash flow on a monthly or yearly basis.
With the introduction of payment policy your cash flow can be sped up. Make your payment terms short and ensure that you get paid at the earliest. Make payment method easy for your customers. Keep a number of payment methods and also offer small discounts on early payments. This will encourage customers to clear the payments early. On the other hand charging customers who pay late reminding them of your term is another way to let your customers make aware of the payment rules.
With regular reviewing and evaluating your inventory will help you gain knowledge of the costs and benefits of your stocks. Unnecessary stocks can make shortage on your cost and lead to lower cash flow. Again if you have little stock then it can ruin your image and breaks customer relationships. Thus make sure you have continuous stock but not exceeding to gain right cash flow and more number of sales.
Get Instant Loan
It might be a big problem for many business owners to secure loan from bank in times of need. Angel investors are also hard to find. Moreover venture capitalists may not get interested of small business opportunities. In such cases payday loans are the only bets solutions for startup owners. It is the easiest way to gain loan in short time with no hassle of procedures.
When you have ongoing payments on vehicles or business equipments you may experience negative cash flow. Always find leasing company vehicles and machinery instead of buying straight away so that you can avoid cash burning. Make sure you are getting the best deals on insurance, technology and other equipments before taking. Cut extra staffs and turn your work zone into an environment-friendly zone to reduce overheads. These changes do wonders over time helping you to save your cash for potential assets such as staff training and more.
On the basis of the nature of your business you may want to consider accepting credit or debit cards. This way you can easily receive payment of the services or products sold without any procedures to handle cheques or making deposits. No matter how you serve over the counter or online card payments is the easiest way.
An efficient accountant can help you gain thorough insight of your cash flow after reviewing cash flow projections and results. You might overlook few essential areas which can be highlighted by an accountant. This way you can anticipate and plan for future also.
Use Continuity Sales
Most of the time a company tends to sale more products to the existing customer in order to stabilize the relationship and create a strong customer base. In order to make this tactic cash-flow weapon continuity sale has been very beneficial. This is a way to improve your cash flow by offering deals and discounts to your customers on products and services for a fixed period of time. This includes a subscription such as a newsletter or a magazine. You have to pay the publisher for the subscription upfront for a year and in return you will gain better deal. This tactic can be used for any business. Thus you get a good customer relationship and profits in the long run with cash upfront.
So, decide wisely and make changes that will suit you to earn a stable cash flow. Make cash flow your first priority before you start a business.