Photo by Artem Bali on Unsplash
Running a small business can be a difficult task. When you ever have the time to go through the financials, it can be stressful when you find some shortfalls with cash. It’s even more stressful when this is a pattern month after month. So, if you’re facing crunch time and trying to meet the demands of payroll or purchase supplies, it’s time to focus on cash flow. Here are some ways that you can increase your cash flow for your small business.
- Generate more business
Easier said than done, right? Well, one of the easiest ways to get more cash is to get more customers. How do you do this? For short-term spikes in sales, there are a variety of options to choose from. Here are some of the popular ones:
- Launch a limited offer or sale
- Implement loyalty rewards
- Run targeted ads
Special offers are extremely effective with both existing and new customers. Create an offer that coincides with your customers’ mindset. Do your customers face seasonal challenges? Would they jump on an offer that helps them save on costs?
Loyalty rewards are effective for targeting your existing customer base. If you can segment your CRM and create a rewards program for your most valued customers, it can be a win-win for short-term sales and long-term customer rapport. Salesforce put together a post that outlines some examples of these types of loyalty programs.
In addition, run targeted ads using Facebook or Instagram. By using a custom audience (and using data of customers you already have as a baseline), you can reach the best types of customers who are likely to buy. Combine a special offer with the hyper-targeted functionality of Facebook and you can generate some sales quickly.
- Offer flexible payment options
Sales are a big component to generating more cash. However, if you’re offering customers products & services on credit, you’re not really helping with your cash flow problems. Instead, encourage customers to pay with a credit card or ACH transactions. These types of sales provide instant cash for your business and also reduce the time you spend on collections. In order to further entice customers to pay with expedited methods, offer a discount on upfront payments. Customers often will take a larger discount in exchange for providing payments upfront.
- Look for places to save money
Every business can do a quick review of their expenses to see where they can trim. In fact, this is a good activity to conduct on a quarterly basis. Here are some great options:
- Go green – Going green can save you a lot of money every month on your utility bills. It can also help save the world! Something as small as switching to energy efficient light bulbs can really make a difference. In addition, do you need to print out everything? What if you develop a more robust digital file management system to store information?
- Change providers – You may be able to save money by switching cable, phone or internet providers. Also, look to see if bundling can help if you aren’t already involved on a consolidated plan.
- Wait on tech updates – While technology is extremely helpful, some businesses make it a priority before they should. If a hardware upgrade is not essential, it’s probably best to simply let it go. Wait until it’s necessary.
- Conduct a review of your monthly expenses – Are you using all of the software you have on-hand? Review your monthly credit card deductions and determine if you’re actually using every application. Review contracts and determine if you can get out of any software plans – especially those that offer limited value.
- Get serious about delinquent payments
Depending on your business, you may send people invoices for your goods and services. Unfortunately, not every customer pays on the due date. This can affect your books, so take it seriously. People who pay late should receive a penalty for late payments. You can also get on the phone or simply send consistent reminder emails. If you can’t collect, go to a collection agency to see if it’s advantageous for them to handle the account. For customers that do pay on time, offer a small discount for paying early or immediately. You can also create a payment schedule that gives you money when you most need it.
Small business is the backbone of this country. Of course, this country was built on hard work and intelligence. You must utilize both to get the most cash flow possible out of your business when you need it. Hopefully, these small tips can help your bank account grow and meet the ever evolving demands of running a small business.