A steady stream of income coming in is crucial for every business. It is even better than having a large influx of cash only during the holiday season and then having to stretch the rest out for the rest of the year.
If you can manage it, of course, then having a decent cash flow around the year and an influx during a certain period (usually the holidays) is always the best-case scenario.
Regardless of your business’ industry, or how old or how small your company is, you can improve your cash flow. There are several tips and tricks to do this, from budgeting to increasing revenue streams, so use this guide to get started:
Know How to Get Invoices Paid, Fast
Invoicing is a pain at the best of times. If you are lucky, there is no delay from the client or customer, and you are paid on time and without hassle. This isn’t always going to be the case.
Sometimes you will have irritating clients who are either flighty, difficult to get a hold of, or are not interested in paying you. They may claim that your level of service wasn’t satisfactory or try to put you through any number of hoops.
Any delay will impact your cash flow and potentially hurt your business, especially when you first start out and don’t have the budget or reputation to keep you steady.
Thankfully there are options. For freight companies, for example, you can get invoices paid upfront and fast by using freight factoring.
In essence, what you are doing here is selling your invoice to a freight factoring company that buys the invoice for slightly less than it is worth. You get money upfront and don’t need to worry about chasing down that broker.
The process is a bit more complicated of course, but you can learn all about it from this post on freight factoring.
Improve Efficiency Using Integrated Systems
The next step is to keep operating and overhead costs as low as possible. One of the best ways to do this (especially if you are a new company) is to increase the efficiency of your business.
Finding and building the right operating system is a must. This means finding the cloud-based management tools that you need and making sure that they 1) can communicate together and 2) are optimized to communicate together.
For example, you should be able to keep track of what your employees are doing and how far along they are with any project with a project management tool.
This tool should also be integrated into your financing and inventory departments, so that you can pay bills on time, send invoices as they are ready, and of course so that you can always keep on track of your inventory and never run out.
An efficiently run business is great for your budget and actually better for your employees, but it can be very hard to build.
You will want to communicate openly with everyone working for you to get insight that you won’t have and work to find the precise solutions and operating measures to make it easy, intuitive, and fast to work in your company.
Find Ways to Reduce Cost or Even Make Money Back
Being efficient is going to make your money go further. To really start recouping costs, however, you are going to have to look at your expenses and see if there are opportunities to make money back.
One of the biggest opportunities for businesses is with their waste. Recyclable waste, in particular, can be bundled and sold to recycling companies.
What this means for you is that, instead of just paying for waste management, you can make money back on something that previously just burned money.
These types of solutions exist throughout your business, but you need to be clever and creative to see them. You also need to be wary.
While sometimes you may be able to make money back or even reduce the cost entirely, other times the effort will not be worth it. Know which is a good investment and which is best left as-is for good results.
Expand Revenue Streams
There are so many ways that you can expand revenue streams to keep cash flowing and to ground your business.
Operate In-Store and Online
The first and easiest solution is to have an online store and a physical location, if applicable. This way, you can benefit both from foot traffic and expand your reach beyond your local neighborhood.
You won’t want to expand your product range or services all at once, but this is a great way to bring in more revenue. Think in stages with this, and start expanding one step at a time with the biggest money makers coming in first. A plumbing company, for example, can offer bathroom design services.
Partner with Other Businesses
There is so much potential when you collaborate with other businesses. You can refer customers to a similar business in your field to get a commission. You can sell more products by partnering with local artists or other companies to offer a new range.
This tip applies to companies big and small. An artist can sell their art to a staging company. A bakery can sell its products at a local café. There are so many ways you can sell more by getting involved with other companies, so get out there and get to know your neighbors.
Investing your money isn’t just something that is smart for you, personally. It is also a good way to invest in your business. This can be directly or indirectly.
For example, you can invest in stock shares to gain interest in a company. You could even look to buy out a small company entirely if it will be more cost-efficient in the future to control and manage that part of your supply chain instead of solely dealing with suppliers themselves.
How you invest and what you can invest in will differ, so it is a good idea to get in touch with a financial advisor to discuss the options your company has.