Cash flow problems are every small business owner’s nightmare at one point or another but it’s normal to go through the occasional rough patch however, that doesn’t mean these rough spots should leave lasting damage on your finances.
So the main question is.
Are you experiencing troubles with maintaining a consistent cash flow in your business?
If the answer is yes, then don’t worry, here are a few ways of improving your net cash flow.
Accept Credit Cards From Customers
Many small business owners make the mistake of thinking that they can’t take credit cards. However, nowadays consumers use credit cards to make a variety of purchases and many don’t carry cash on them. The downside to accepting credit cards can be the two to three day delay in receiving the money, however finding the right payment merchant can reduce this and the impact will quickly change as the cash flow from these transactions pour in.
Catch Credit Faults Earlier
Always keep track of your customers and their invoices. The best way to stay on top of your invoices is to send out reminders the week before payment and to follow up the next day if payment hasn’t been made. You want to create a happy medium of keeping the working relationship strong but also making sure you receive the money you are owed. If a paying customer does not pay straight away always call up to offer support and guidance if they are struggling. Do not wait until they have been delinquent.
Raise Your Prices
When you start your own business the majority of the time you keep your prices low to grow your customer base. However, in order to create a steady income there will be a time you will need to raise your prices. In order to know when the right time is, is when your customer base is at a consistent number each week. You have to be careful though, you don’t want to raise your prices so that you lose business. The best way is to implement it slowly by raising the most popular product and seeing how your audience adjusts.
Get Pay Advances
Don’t be afraid to ask for pay before you start working. This is not unreasonable in most industries, and your client should not have an issue paying this. Not only does this help you feel at ease when doing the job but it also allows you to know what kind of client you are working for. If they are being difficult then it’s a major red flag, if they are not being difficult then you know you are going to build a great relationship.
Cash Flow Management
Make sure you have systems and processes in place to efficiently invoice your clients, send regular reminders, highlight overdue payments, chase overdue payments and forecast your cash flow. Remember a client that hasn’t paid is a borrower!
Cash flow is key in building a successful business. It is one of the many areas that businesses struggle in. If you found this article useful but want to discuss further please book a free coaching session here.
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