For most small businesses, revenue gains are nothing short of a pipe dream. The idea is to collect receivables as quickly as possible while slowing down payables without straining relationships with suppliers. Although the formula is simple, to most companies, it’s easier said than done. Owners of small companies are trying to figure out ways to squeeze as much cash flow as possible out of their current operations. That’s why small businesses usually go for the quick fix – obtaining instant business loans to secure their funding. If you’re dead serious about improving your cash flow, check out these tips:
1. Send Invoices ASAP.
Keep in mind that the lifeblood of any small business is its sales and invoices. No one ever gets paid if they don’t send invoices. When it comes to invoicing your customers, it’s best to stay on top. If you send your invoices as quickly as possible, cash comes in faster than ever. Think about switching to cloud-based inventory and manufacturing software that generates easy-to-create invoices. Software that can provide excellent invoicing capabilities that can speed up the whole process and boost your cash flow.
2. Get Your Customers to Promptly Pay Invoices
One of the best ways to improve your cash flow is to send email reminders a few days before their invoices are due, on the day that they’re due, and a few days after. Give them a call and don’t stop sending invoice reminders if they still haven’t paid. You can find plenty of accounting programs that feature built-in invoice reminders to send to late-paying clients. You can also encourage your customers to pay on time if you offer a small discount to those who pay their invoices within the first week that they receive them.
If you want, you can also charge a late payment penalty to ensure successful invoicing. Be upfront about the penalty for late payments and clearly state when it will be charged and how much they will be charged. Most companies include this in their terms and conditions section found in their invoice. Before you implement this, be sure to do your research on what a regular late penalty policy looks for your particular industry. Having a strong invoicing policy in place and sticking to it will set you apart as a professional. It will also increase your chances of getting paid faster.
3. Increase the Prices of Your Products or Services
If your company is hurting for cash flow, you’ll need to determine what your competitors are charging. You’ll also need to check if the prices for inventory or equipment have increased or if the number of manpower for your inventory assembly or services is met. If the prices of your products or services outweigh the time you put into creating your products, you might need to increase your prices.
The point is that you’ll need to strike a balance between fairly compensating all the hard work you do and keeping your prices competitive. Keep in mind that you wouldn’t want to be selling yourself short. Sales are great, but you also want to make a profit. Your business will also come off as less qualified if your prices are too low.
4. Brainstorm New Sources of Income
Consider expanding your sales market to increase positive cash flow. Get your team together and brainstorm new sources of possible income. You might want to think about adding new services or products for your business. If your products are already spot on, you may need to create new marketing strategies that would effectively get the word out about your company.
You can also encourage your existing customers to spend more of their money by offering bundle items or advertising related products. Bundle items are similar products sold together in order to encourage increased spending. Meanwhile, if you’re using an eCommerce platform, try featuring other products that your customers may be interested in. Lastly, keep your loyal customers happy by implementing rewards programs or offering them discounts. Doing so will encourage them to grow your business for you.
5. Reduce Cash Going Out of Your Business
When it comes to managing cash flow, you’ll also need to reevaluate your operating expenses. You can manage to do so by cutting out unnecessary expenses, streamlining your business processes, and buying or leasing more efficient equipment. You can also try asking your suppliers for bulk inventory rates.
6. Take Out Instant Business Loans
You can also increase your cash flow by taking out instant business loans. Short-term loans allow you to obtain a lump sum of cash that can be paid back in regular installments within a short period of time. Doing so will give you a chance to purchase inventory or new equipment, expand your business, cover off-season slumps, cover unexpected expenses, and take on profitable projects.
Do You Need to Know More About Instant Business Loans?
If you need more information about instant business loans, contact the lending experts today. They’ll help you manage your cash flow so that you can effectively run a successful business.