3 Things You Can Do to Fix Your Cash Flow Problems
Maintaining a steady cash flow is the key to any businesses survival. The majority of businesses won’t have a steady revenue stream all year round. And that’s okay. The important thing is to make sure you’re able to act accordingly should a cash flow problem arise.
Whether you’re customers are paying late or you don’t have enough customers there are plenty of solutions you can use to get back on your feet. Here are three things you can do to fix your cash flow problems.
Use Smart Invoicing Strategies
Invoicing seems easy enough right? You send them off and they get paid. Wrong. If you’re having trouble collecting money from clients it may be because of your invoicing habits. Improving how you handle client billing will increase your cash flow and improve your relationships with clients.
First and foremost you should utilize an online invoicing solution. This will allow you to keep better track of your accounting and will give your clients an easier means of payment. Your invoice should have clear terms and you need to be strict on your due dates. As long as you’re consistent with clients they will respect your methods and will be conditioned to make payments on time.
Raise Your Prices
If you’re making sales but struggling to bring in enough cash each month it may be a good idea to raise your prices. There’s clearly a need for your products or services but maybe you’re having trouble getting enough customers in the door. Sure you can spend more money on marketing but that won’t guarantee an immediate return on investment.
If your customers aren’t gawking at your prices then it’s totally reasonable to adjust them. A smart tactic you can also use is increase your prices and offer a sale at the same time. If you make sure the amount of the sale is still higher than your original price your customers will be happy and so will your bank.
Trim The Fat on Your Team
When times get tough it’s common for business owners to let a few employees go to save costs. While it’s not always the most enjoyable process sometimes it has to be done. If it’s completely necessary you should revaluate your team and see which employees are absolutely necessary and which aren’t.
That said, you don’t have to remove them completely. Maybe you can simply reduce engagement until you can bring in more cash to afford them. If you’re transparent throughout company reorganizations your employees will still respect you at the end of the day.
A short-term cash flow problem often doesn’t pose a threat. However if the issue lingers on for too long it can become a serious problem for the entire business. The worst thing you can do when a problem arises is avoid it. It’s common for business owners to fear the truth. Maybe customers simply don’t like your products or services. If you don’t listen to the market it won’t respond well.
It’s easy to get overwhelmed when disaster strikes but the best thing you can do is attack it step by step. If you’re having cash flow problems use one of the three strategies described above to get back on track.