If you’re a small business owner, it doesn’t matter what industry you’re in or what type of services you provide. One thing that often faces all businesses is cash flow. Cash flow is the amount of money a company has to invest or spend on a day-to-day basis (or within one year if we are looking at cash reserves).
One key aspect of cash flow is how well funded your business will be for the foreseeable future. Below are nine ways to help you improve your financing and solve your cash flow issues.
1. Set up an Automated Payment Plan
If you’re a small business owner, chances are you have had to deal with the hassle of having to write checks for bills that come in at different times of the year (often before companies send their bills out). One way to get around this is to set up an automated payment plan. The goal here is to have your business send out the payments for recurring bills electronically. This way, accounting will send the money to your bank electronically and you won’t have to write those checks.
2. Track Your Sales Data
Most small business owners have a limited amount of data when it comes to sales data. Even though the data may seem accurate and reliable, small business owners often struggle to write it down. This is because many times they have to run around on top of their business checking the sales numbers for the day. Instead of having to do this time and time again, track your company’s sales data on a daily basis. By tracking this data, you will be able to know which products were selling and how well they were selling at any given point in time.
3. Use the 80/20 Rule
It’s a known fact that 80% of your sales are made up of 20% of your products. Knowing this, if you want to improve your financing and solve cash flow issues, look for ways to increase the number of sales done on those 20% products. If the numbers aren’t what they used to be, it might be because you haven’t advertised those products enough or you’ve cut back on their availability (i.e. which products are available for purchase). No matter the cause, these are the areas you should focus on increasing. The end goal is to increase their sales, and that will lead to an increase in your financing and a decrease in cash flow problems.
4. Create a Database
Most small business owners get overwhelmed by the amount of information they need for their business instead of collecting it in one place. By creating a database for your business, you’ll be able to collect all the information (i.e.. names, phone numbers, addresses, etc..) in one database. This way you’ll know exactly where your customers, as well as your suppliers are at all times.
5. Clean Up Your Credit Report
If you’re having cash flow issues due to a bad credit report or overstayed credit limit, there are ways to fix this. One way is to have your credit report professionally cleaned up and updated. If this doesn’t work (because of other reasons than unpaid bills), it may be best to look into a loan from one of the many financial institutions.
6. Get Some Help From a Financial Adviser
Many small business owners don’t know how to go about getting financial help. Instead, they go to their local bank or credit union for help instead of an advisor that can make them more money and solve their cash flow issues. Even if you have no savings, you can still get the help of a financial advisor that will offer the advice or products that can help you boost your financing and solve your cash flow issues. The key here is to find the right financial advisor for your business.
7. Consistently Budget Your Business’ Money
Nobody likes to budget, but those who do reap the greatest benefits from it. It’s important to put in a consistent budget for your business so that you know where the money is coming from every month. Most businesses lack this knowledge and end up overspending which can lead to more problems. One of the most important aspects of a budget is paying yourself. By putting money aside for you, you’ll be able to take it from the business and use it for other things (such as paying down your debt).
8. Set Up Regular Meetings With Your Team
One important aspect of being a leader is setting up regular meetings with your team (aka fellow business owners) so that you can keep in touch with them. This is also a good way to find out ahead of time if they are having any problems. As an example, you might come into one of these meetings and find out that your supplier hasn’t paid them in three months. This is an important piece of information for you to know, because it may be related to the problems you are having with your financing.
9. Get a Financial Planner
Whether or not you have debt, you’ll need to save more money if you want to be able to make debt payments and pay off your credit card balances. The best way to do this is by working with a financial planner that can set up a monthly budget for your business and show you how it will work. They’ll also be able to advise you on which financial products are best for your business so that they are available when needed.
Cash flow. It’s a mystery to most people, yet it can dictate your success in business. But, you’re not alone! In this blog post, we had looked at the 9 best ways to improve your financing and solve cash flow issues for you small business or start-up company.
There are tons of people out there who are “in the trenches” every day, working to make a living and avoid poverty. And they’re doing it with their own businesses. Unfortunately, however, there’s also a lot of them who don’t have the expertise or courage to reach out for a little help. If you like our approach on this topic do reach out to us we would be pleased to serve you in any way possible.