For any small business, the most common challenge they face, even in good times, is maintaining their cash flow. In the current circumstances resulting from the financial collapse caused by reckless banking practices, small businesses are being doubly squeezed. Their suppliers are slow to pay and the banks are even slower to extend short-term financing agreements. Here are 9 tips to help you improve your cash flow and keep your business in the black.
1. Add Upsells – Direct your sales people (or yourself!) to try to make an upsell to complement the main one.
2. Chase your bills: Remind other businesses when payment is due and chase it
3. Raise your prices – Depending on your market, you may be able to do this. You need to stay on top of your sales numbers to make sure they don’t drop.
4. Choose your best customers and offer them a special offer for a limited time.
5. Improve your terms of trade if you can. Try and reduce the time from 30 days to 14 days or even COD with an incentive discount.
6. Pay your bills as late as possible by maintaining good relationships with your suppliers. This is an art, but it is doable with care and attention.
7. Get rid of defaulters unless they are high-volume buyers. They are probably not worth the time and effort.
8. Spend less on marketing but focus it more carefully. For example, maybe you only advertise in the trade press or go online and use websites and email.
9. If you know your target market, find a complementary company that also supplies them and work out a scheme to support each other. This will probably be much cheaper than paying for a direct mail delivery, although it may take longer to organize. It depends on how much you are willing to spend and your earnings expectations.
These are just 9 suggestions. With a little effort, you’ll be able to create many more and steer your business through today’s tough times.