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3 Easy Ways To Improve Your Cash Flow



Just as your body needs rest and food for fuel, your business needs working capital to keep it up and running. Working capital is the fuel that lights your business’s fire and keeps it going day in and day out.

Entrepreneurs that experience cash flow problems know all too well the friction and headaches it can cause. Without working capital productivity and progress are forced to come to a screeching halt. Luckily, with some tips that you can implement today, you can improve your business’s cash flow situation. Read on to discover three ways to ease a cash flow crisis.

3 Easy Ways To Improve Your Cash Flow

#1. Marketing Dollars Must Make Cents

Despite what you may have been told, every new season does not require a new marketing campaign. While tweaks should be made to reflect the current happenings on the general public (i.e. 4th of July, back to school, holiday season) continuing to pour marketing dollars into an ever changing environment does not make sense.

Instead use your marketing budget to create a solid (yet flexible) campaign that you can easily alter. A tagline and motto that matches your mission statement can easily be customized to match the current culture.

Keep the relevant information up to date (like contact info) and explore free marketing outreach outlets like Twitter and blogs that can get your word out without costing you upfront capital. In many cases you will not need to hire a social media manager. You can instead just focus on one thing, producing great content. Consider hiring an intern who can post/edit content, make videos and add pictures to your account. Hands on experience for free labor provides a win-win exchange.

#2. Check In with the Joneses

Take a minute to review your house costs, prices and profits. Perhaps it is time to update your price list. Check in with your local competitors and see what rates they are applying to products and service that are similar to yours. A common pitfall of the small business owner is to undervalue his/her work, make sure your rates are fair but at the same time, competitive.

Additionally, you could increase your working capital by promoting discount offers and sales. Cash flow can get a boost with an influx of bargain shoppers. The key is to get the word out about your momentary price drops. Consider offering your discounted services on sites like Groupon or bring online discount codes to your next networking event. People love a good deal almost as much as your working capital will enjoy the boost.

#3. Buy For Quality and In Bulk

Sometimes in order to save you have to spend. Inexpensive, used equipment may have saved you some funds upfront, but constant repairs and pauses due to “issues” can be costing you much more in the long run.

Stop pouring money into faulty equipment that is killing your productivity (and profits). Buy quality now and never look back.

While some entrepreneurs may be shaking their heads thinking, easier said then done, there are ways you can afford quality equipment, inventory and supplies the first time. A merchant cash advance can allow your business to get a jumpstart on the investments it needs to make now. With payback systems that work with the flow of your business, your business stands to gain both now and later.

What other ways can you improve your business’s cash flow?

Images: ”The letters CASH FLOW with stacks of coins on gold background  / Shutterstock.com

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The Author:

Kelly Gregorio writes about management tips and workplace trends while working at Advantage Capital Funds, a merchant cash advance provider. .

Add Your Comment

  • http://www.ahaingroup.com/ Niall Devitt

    Hi Kelly, Cash flow is a significant problem for most small businesses and these are some nice tips for helping us all to save and manage money. Thanks for sharing & wishing you a Happy Holiday.

  • http://www.callboxinc.com/ Belinda Summers

    Love the last tip. Instead of investing on some faulty equipment that would just create some major problems in the future, it’s better to purchase quality products that would last. Thanks for sharing. :)

  • http://www.ahaingroup.com/ Sian Phillips

    Thanks for a great post Kelly. Being an accountant myself I know how important cash flow is. A main problem I find is that some people think they’ve done well when the sale is made – but until it is paid for it’s pointless do debtor control is very important too. I look forward to your next post and Happy New Year

  • Harry

    For small business owners cash flow is like life blood. Too many small businesses fail due to cash flow problems. You need to keep a watchful eye on cash inflow and outflow and control your spending to match cash coming in.

    I particularly like the last one. You don’t need to spend money on fancy furniture and equipments in the early stage of the business. Try to avoid, or at least control, these expenses and you will be able to save enough to spend on activities that bring in additional business and cash.

  • Keith Upkes

    Kelly, great post. One other tip… For every new expenditure of cash, businesses should do a BEA (Break Even Analysis). You must know how much NEW revenue you will need to secure to pay for the new expense. This is a very easy calculation and when done consistently is life changing and life saving for a business.

  • http://growthforce.com/ GrowthForce

    Buying in bulk is a great way to save some cash and better optimize your cash flow. It never hurts to call a vendor to see if you can purchase larger quantities at a lower price of if they offer a pay for x-amount of months in advanced and get a % discount. The less cash you have to spend on overhead, the more you’ll keep within the business.