Cash flow can be difficult to maintain for small businesses, especially as they’re faced with the unexpected. Supply chain issues, inventory problems, and lots of open invoices are just a few of the challenges entrepreneurs must navigate as they try to keep their accounting on track. Making some changes to your daily operations may be necessary if your cash flow isn’t as healthy as you’d like it to be, but you don’t have to do anything drastic; assess the areas of your business that could use updates and set some small goals for the coming months. You can also take steps to streamline your business practices. Here are a few ideas to help you get started, courtesy of Dali Marketing.
Start by Assessing
There are many aspects of business that affect cash flow, so it’s crucial to sit down and assess which ones are still working and which ones would benefit from a little change. If you’ve experienced some growth recently, you might consider altering your business structure in order to incorporate or form an LLC. You can also think about launching a new product or service to bring in additional revenue, which might necessitate a DBA – or Doing Business As – name. Take some time to learn the benefits of each type of business structure to find out which one makes the most sense for you right now.
Once you’ve decided on the right structure, redouble your efforts in terms of advertising! A logo is a great place to start, since it puts a face on your business. However, if you can’t afford an expensive graphic artist, use this free logo generator in concert with social media to help spread the word.
Take a Look at Your Practices
Revisiting some of your daily operations is another great way to find extra cash. One of the biggest issues for many small business owners is an invoicing system that isn’t working up to its potential. If you constantly find yourself chasing down payments, it may be time to change your policies. Make your payment terms clearer, set up automated email reminders near due dates, send an invoice as soon as possible, and ensure that you accept a variety of payment methods so customers have lots of options. This might include cash, check, credit card, and/or digital payments. Using a premade invoice template will allow you to customize the wording, colors, and fonts while putting your logo and other branding info front and center.
Give Customers a Reason to Pay Early
Sometimes, even with a solid invoicing system, it can be a challenge to secure payments on time. Most customers have good intentions, but if your invoices aren’t a priority they may get lost in the shuffle. Give your customers a reason to pay early by offering an incentive, such as a discount on their next purchase or a special offer on a service. This will help them keep your business at the top of their list when it comes to paying on time.
Get Some Help
Staying on top of your accounting information can be challenging as your business grows and experiences fluctuations in income, but you don’t have to keep up with it all on your own. Consider hiring out your accounting and payroll tasks to ensure that nothing is overlooked and that everything is in tip-top shape. While this will require an outlay of money, it can help you save throughout the year because you’ll have a professional eye looking out for tax advantages, mistakes, and opportunities.
Invest in the Right Tools
As you’re making changes to your invoicing system, accounting resources, and payment methods, take a look at some of the other tools you use on a daily basis. Do they still work well for your needs? Software should be updated often as technology evolves, including the resources you use for accounting and inventory management. Not only do you need to keep track of products as they’re sold, you also need to know how much is sitting in your stockroom and how long it’s been there. Keeping a lot of stock on hand at once can eat up quite a bit of cash, and if it’s not moving at a steady pace you’re essentially leaving money sitting in your stockroom. Doing regular inventory counts and taking action to keep stock moving is a good way to maximize your cash flow.
Keep Things Secure
When it comes to your software and daily operating tools, how do you keep them secure? What type of safeguards is in place to ensure that your data and customer info aren’t exposed or stolen by hackers? Cybertheft can take a hefty toll on your cash flow by creating legal issues and the need for PR services to help undo the damage to your reputation; the good news is, there are several tools available for small business owners to help combat cybercrime and keep sensitive data under wraps. Using the right cybersecurity software can go a long way, but you can also take precautions in your store or office by updating passwords often, only giving access to important info to upper management, and utilizing safe practices on computers and devices–especially if your employees use company phones or tablets.
Take a Second Look at Your Contracts
Once you’ve gone over your operations and tools, it’s also a good idea to look at existing contracts with vendors as well as service plans to look for possible ways to save money. Things like monthly utility bills, software support, and even vending machine services can potentially be changed out for better deals, but it’s essential to look over your contracts first and compare them with current plans. Some companies may even give you a break on their services if you’ve been a customer for a while, so it never hurts to ask! You can also think about whether any of the services you pay for can be bundled or eliminated altogether.
Improving your business’s cash flow is never an easy task, but there are several ways to tackle it that won’t create a headache for you down the road. Take a look at your current practices with an unbiased eye; this will help you determine where changes need to be made.
Dali Marketing is based in Irvine, Orange County, California, and employs a vast wealth of experience to serve companies with digital marketing and business needs from all over US and Canada. We’d love to hear from you!