Running your own small business requires not only a great business strategy, but also a great business management skills. For your business to grow it is very important for you to explore ways to improve the operational cash flow of your small business and maintain it on the positive side. Here are five ways to increase your cash flow.
Pricing Strategy Evaluation
Many small businesses underestimate the importance of pricing strategy with cash flow. Optimizing your price can increase your sales, improve your bottom line, and provide you with positive cash flow. To find the right price for your small business, conducting a market testing by using a variety of different prices would be a great source. It may take some time to find the right balance, but when you find the right price it will have an immediate impact to your cash flow.
It’s very important for small businesses to remain disciplined in regards to accounts receivables collection. The easiest solution for this is to find software or an application that automatically invoices your clients. This is especially helpful if you have recurring monthly invoices. Don’t be afraid to charge your clients for late payments. Business is about punctuality and credibility, if a client finds that they can pay you late on invoices without a penalty, then you are setting a precedence for late payments.
Multiple Payment Options
Businesses that accept a range of different payments are less likely to lose a sell. Consumers appreciate variety when looking at their alternatives, and this will make you win the customer over your competition. While not every payment type is cash flow friendly, the more sales you make can mitigate any delay in recognizing revenue.
Loyalty Deals for Sales Continuity
Many small businesses work with recurring clients. Recurring business is extremely valuable to your business’s operating cash flow. Therefore, it makes sense to cut some margin on the products or services in an effort to gain more recurring clients. Offering small deals or discounts to loyal clients will far outweigh the few dollars you lose on the discount. The value of these continuity sales is very important for your business’s cash flow stability.
Hire a Good Small Business Accountant
Finding a CPA Firm with experience working with small businesses in your industry can help to optimize your cash flow and provide financial insight. These professionals can also look at your budget forecasting, expenditures, bookkeeping, and other financial areas of your business to find inefficiencies, errors, or opportunities, such as tax breaks or credits for your small business.
As a small business owner, you’ve likely spent a lot of capital into making your dream a reality. Don’t let poor money management and hinder your chances at long-term success. These cash flow management tips above will help your small business get on the path to positive cash flow.