Just as our bodies need food and our lungs need air, your business needs a healthy cash flow to survive. Regardless of how profitable a business may be in black and white, without tangible cash it, unfortunately, is only a matter of time before open signs turn to closed.
From supplies to utilities, from materials to mortgages, it’s only normal for a business to have a steady outflow of cash. However, lagging invoices and slow seasons may not provide a steady balance of influx. Read on to discover five ways in which you can nix cash flow problems. With tweaks to policies and changes in perspective, you can calm your cash flow crisis once and for all.
Purge for Profit
Chances are when you first started your business you acclimated things you thought needed. From equipment to storage space, you may have paid out for certain must-haves, only to find that they turned out to be more like don’t-needs.
One easy way to free up some cash in your business is to purge yourself of the assets you’re not utilizing. Consider selling off that equipment, or renting out a portion of your office space. Not only will you simplify your surrounding space, but you’ll quiet your immediate cash flow fears.
Also, don’t limit the purging to just your business. Consider your personal available assets (jewelry, boats, cars) that you could get by without. Dedicated business owners will take more comfort in available cash than materialistic items; consider if this option feels like a fit for you.
Contests and Contenders
The internet is beneficial to entrepreneurs in a variety of ways. Still, most small business owners are clueless when it comes to the competition (and crash-worthy) contests just within their reach. A simple Google search can open your eyes to advertising contests (like a commercial on the Superbowl!) or video-submission competitions.
Also, take some time to see if you are a contender for any available grants. Like any cash-driven award, there are some stipulations, grants tend to be strictly for non-profits, technology, research or health-based businesses. Also, while the money is free, in some cases grant money will only be awarded to those businesses that can currently match the offer. Still, the truth remains that you never know until you take the time to look; and at the end of the day, you have nothing but cash to gain.
Stage a Sale
Rather than sit, wait and hope for your cash flow problems to be fixed, empower yourself with action that you can take right now. Consider promoting a small sale that can get things off of your shelves and funds into your pocket. Brand your specialized sale by pairing it with a current event (like a holiday or a global event such as the Olympics) to encourage buzz and increase your chances of your press releases getting picked up.
Consider an Advance
For the business owner who is experiencing a more pressing cash flow situation, it’s important to stay educated on your options. The popularity of alternative funding only keeps growing in face of a tough economy and even tougher stipulations put on by traditional lenders. Something like a merchant cash advance can free up some cash flow so that you can make an investment (like marketing or renovations) back into your business.
Like all lending opportunities, it’s important to understand the terms and facts before you sign on any dotted lines. Find a lender you are comfortable with and who will take the time to educate you on your options while avoiding putting your business under any undue pressure. Those entrepreneurs that are thinking about perusing the alternative lending path should seek out lenders that have experience within their industry and who accredited by the BBB.
Charge More, Offer More
When was the last time your business increased its prices? It’s common for entrepreneurs to hesitate with a move like this as obviously the last thing anyone wants to do is turn customers off. However, if you’re considering charging more, keep in mind that you can always offer more too. For example, X product now costs Y, but in addition, customers will also be getting Z.
Before you alter your price tags, consider the considerate move of informing your current, most loyal customers of upcoming increases. You could always extend an offer to purchase a “package” of products/services now at the current rate and as a result, experience an immediate boost in working capital
What other ways can you improve your small business cash flow?