Improving your cash flow can help your business in many ways, especially cash inflow. Having more money coming into your business is a sign of growth, which in turn aids meaningful outflow such as further investments and replenishing used up stocks. Keep reading to learn how you can meaningfully increase cash flow in your business.
One of the ways you can increase cash flow in your business is to increase sales of your products or services. You may want to raise the price of your service, especially if it is second to none in your locality – but do not raise price outrageously or you will end up losing a lot of your customers.
Another way to boost sales in order to increase cash flow in your business is to look into new markets and start promoting your offering in the new location. Opening a branch by identifying a new and viable market can help double or even triple your business earnings.
More importantly, you should sit back and assess your operations to see what you have not been doing right or have been doing poorly. For instance, how good is your customer service? Do you get serious with quality control? Ensuring quality in both your service and products is a great way to attract and retain customers. If your in-house employees are too busy to offer quality customer service, it is better to outsource customer service.
Also, you can boost sales by reducing the prices of old inventories. This way, you can sell off faster and increase cash flow. You should also think of offering a discount to bulk buyers, more discounts than your competitors are offering so that you can attract more customers.
Establish Terms of Payment from the Onset
From the inception of your business, you should establish payment terms for every transaction. It’s important to have a solid business policy so that customers won’t take your business for granted.
For instance, the terms and conditions of purchase should be clearly written and placed in a strategic place. Also, consider including such policies in payment receipts as a reminder to customers. They should be aware if payment has to be instant for example. And, if you offer credit sales, what is the maximum duration of payment and the applicable fine/fee if defaulted?
Cut Back Expenses and Overhead
Also, you can boost cash flow by cutting back expenses as well as overhead. When you spend less, you incur fewer expenses. So, sit back and look at your cash outflow. You may spot loopholes – areas you have been spending unnecessarily. For instance, you should consider locating your business to a building that attracts less expensive rent than where you are currently.
Finally, you should make payment easier and quicker for your customers to help improve cash flow.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams