TIPS FOR INCREASING CASH FLOW
There are a number of tips for managing cash flow for your small business. Here are a few to consider, but first I highly recommend you read Profit First by Mike Michalowicz! I practice and encourage a profit first approach for all businesses.
*Maintain some cash reserves (savings). It never hurts to have a ‘rainy-day fund’ to pay for any unforeseen expenses. Having enough savings to help cover a month or two of expenses will help ensure you never fall behind when business is slow.
*Encourage faster payments. If you invoice customers, you know what it means to wait to get paid. Encourage your customers to pay sooner with ideas like shortening your due dates, offering discounts to customers who pay early, charging a late fee for those who miss their payment deadline, sending invoice reminders and offering multiple ways in which your customer can pay, making it easier and faster for them.
*Keep business loans and credit card use to a minimum. Both are debt, one long-term and the other short-term, but both must be paid back, meaning money paid out. If you can successfully run your business without a small-business loan or credit cards, you will have a better chance for more cash flow in the long run.
*Use SBA loans or credit cards. Conversely, sometimes a small-business loan or credit card can be very beneficial in accomplishing a much-needed strategic business advancement. If your new business advancement or addition of product or equipment will exponentially increase cash flow long-term, the short-term use of debt could be your solution.
*Increase Prices. While your customers do not want to hear about increased prices, when owning your own business, it is a reality that must be addressed from time to time. If you are constantly struggling with positive cash flows, it might be time to reevaluate your pricing structure on your products and services.
I wish you all a great, prosperous 2023!