For any small business the most common challenge they face, even in the good times is maintaining their cash flow. In the present circumstances resulting from the financial meltdown caused by reckless banking practices small firms are being doubly squeezed. Your suppliers are slow to pay and the banks are even slower to extend short-term finance arrangements. Here are 9 tips that will help improve your cash flow and keep your business in the black.
1. Add on sales – Direct your sales people (or yourself!) to try to make an additional sale to complement the main one.
2. Chase Up Your Invoices – Remind other firms when payment is due and chase it up
3. Increase your prices – Depending on your market you may be able to do this. You must be on top of your sales figures to ensure they do not decline.
4. Pick out your best customers and offer them a special deal that is time limited.
5. Improve your trading terms 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 whilst maintaining good relations with your suppliers. This is an art but is doable with care and attention.
7. Get rid of slow payers unless they are large volume buyers. They probably are not worth the time and effort.
8. Spend less on marketing but focus it more carefully. For example maybe only advertise in the trade press or go online and utilise websites and e-mail.
9. If you know your target market find a complimentary firm who also supplies them and work out a scheme to cross endorse each other. This will probably be far cheaper than paying for a direct mail shot, although it may take longer to organise. It depends on how much you are prepared to spend and your profit expectation.
These are just 9 suggestions. With a bit of effort you will be able to come up with many more and steer your business through the present challenging times.
