You’re finally making money in your business, and you’re ready to take things to the next level. You know that cash flow is the lifeblood of a healthy business, but if you’re entirely honest with yourself, you’re not exactly sure what you need to do to keep the money flowing consistently.
Hang in tight because in this online business clinic episode, the place to build a profitable business, we will share with you our smart strategies on how you can keep that cash flowing.
Let’s dive in.
1. Get a firm handle along with your cash flow investment.
Look at what is coming in and out of your business. You need to speed up the cash coming into your business and slow down the cash going out of your business. Have everything mapped out by writing down exactly what’s coming in from your customers.
Check-in with your customers to be sure they are going to be able to pay for that business. Make sure money is coming in as planned. Do the same for the cash going out of your business.
2. Have an accounting software tool to stay on track
You need to track your available cash and the expected inflow and outflow of cash in your business, but it can be time-consuming for you, especially if you’re a busy business owner.
We recommend online QuickBooks, as they are intuitive and easy to use. You’re able to access your data anywhere you have internet access. Get somebody to do it for you. It’s okay if you can do for yourself when you’re starting, but have somebody teach you to get the foundation right.
You can also seek the services of a bookkeeper or a CFO (Chief Financial Officer) to help you manage your finances and grow your business strategically.
3. Increase the price of goods or services
Reevaluate your goods and services’ pricing to check if you’re selling for too little or more.
It may be worrying about increasing the price of whatever goods or services you’re offering, and it may raise a concern about your sales suffering if you raise your price too much.
However, it would be best to test and find out what the market can bear, rather than having preconceived conclusions.
The value of a product or service rises when you increase the price. So, don’t be afraid to raise your prices. Take that chance, friend!
4. Offer a discount for early payments and penalties for late payments
Some customers will pay early if given incentives. For some customers, invoicing is a challenging process that may require some pull and push.
Implementing a discount and penalty program may make it easier for you and make your customers accountable. You may consider giving discounts to any accounts paid on time and add interest to any invoice that is ignored for too long.
This will encourage your clients to pay you early and on time, hence improving your cash flow.
5. Reduce expenses
Take a closer look at all the expenses incurred in your business. If you think an expense is unnecessary, hold back until you’re sure it will positively impact your business. If they are necessary, consider looking for cheaper alternatives to cut down on costs.
You can also look for ways to reduce your operating costs, such as making a biweekly or monthly payroll to reduce payroll processing costs. Be careful not to reduce costs that will hurt your profits.
6. Pay bills on time but never before they are due
Pay your bills on the required time to avoid interest charges. If your vendor offers a discount for paying early, be sure to do that to save some money.
Look at different ways to extend credit terms, and make plans to pay partial payments to make sure your cash flow is in good condition.
If your business is suffering from cash flow problems, you need to take an honest look at your business and how you’re running it. Consider understanding your cash flow statement, use accounting software tools, increase your prices, reduce expenses, and pay bills on time.
1:34 What Is Cash Flow & How Do We Keep Cash Flow Flowing
4:42 Accounting Software
6:39 What Is The Difference Between A Bookkeeper & A CFO
8:21 How To Stop Money Leaks In Your Business
14:31 What Is A PNL
16:00 Cash Flow Management Strategies
18:00 How To Manage Your Money Margins
19:53 What Is A Fractional CFO
20:56 What Is A Money Management Dashboard & Why You Need One
21:35 Small Business Tip To Keep The Cash Flowing In Your Small Business
22:55 How To TRIPLE Your Service-Based Business
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