10 Ways You Can Increase Your Cash Flow
Cash flow is the lifeblood of any business. If it’s positive, your business is sustainable. If it’s negative, it’s imperative to turn things around as soon as possible. There are several ways to manage your expenses to maximize inflow and minimize outflow. Here’s a rundown of ten tips you can use.
Consider increasing your prices for services or products. Make your prices competitive, but be sure you’re fairly compensated. You might be selling yourself short if your prices are too low.
Reducing your operating expenses is a key part of increasing cash flow. A few things to consider are leasing equipment, analyzing expenses, streamlining processes, checking on bulk inventory rates, and upgrading equipment efficiency.
If you don’t send timely invoices, you won’t get paid. If it’s a tedious process for you, consider one of the great cloud-based accounting apps available.
The faster you’re paid, the better your cash flow. Getting your customers to pay on time is challenging, but a few things can help. Being upfront about penalties, providing discounts for early payments, a well-articulated payment policy, and reminders can all make a difference.
To increase positive cash flow, brainstorm new sources of income. They may include rewards and incentives for loyal customers, providing new services/products, a new marketing strategy, and encouraging customers to buy more (e.g., packages and subscriptions).
Be strategic about when you pay your vendors. If your vendor offers a discount for paying early, be sure to pay in the required time to save some money. If the vendor doesn’t offer a discount, pay when it’s most favorable for your business.
Be sure your inventory is actually selling. If you have old inventory that’s not turning over, consider liquidating it. Any money coming your way is an improvement on no money.
An SBA (Small Business Administration) loan or line of credit can boost your cash flow significantly if you qualify, and is a strong option for many businesses.
9. Credit Cards
Consider applying for a cash-back business credit card. It’s a great way to earn each time you make a business purchase.
10. Savings Accounts
To generate a small amount of extra cash, open an interest-bearing business savings account. It’ll provide a bit of a cash flow cushion.
Maintaining a positive cash flow is critically important. Try these suggestions to boost the viability of your business.