If you are a business owner and your sales are growing at an exponential rate, you are increasing profits each year and your company is really taking off, then you are certainly heading in the right direction. Even so, profiting companies can also be hit with cash flow problems if you let your guard down. Ensuring that every element of your business is running smoothly can be tricky, which is why we have put together the 5 top ways that you can raise cashflow.
Increase Pricing
Don’t be scared about increasing the pricing of your products! This can be a daunting move, but if your product really is worth it, then the customers will follow. Experimenting with figures to find the perfect number is also fine, it’s all about seeing how high your customers will go. We know that if you play this right, they will stick around for the ride, and you might even acquire some new ones along the way.
Pay Suppliers Less
Relationships and communication are everything. If you maintain prolonged relationships with your suppliers, there is a much higher chance that they will agree to landing better financial terms with you. Offer your suppliers early payments and see whether they are willing to give you a discount in return. The art of negotiation is key here, and if you can convince your supplier to give you a better deal, you can watch your cashflow increase.
Improve Your Inventory
By improving your inventory, you can charge more for your products. If you find you are struggling to find the immediate cash to upgrade your stock, there are many short term loans for businesses out there that can help you with any immediate payments. Start by taking an inventory check, make a list of goods that aren’t moving at an adequate pace compared to your other products and get rid of products that are tying up your cashflow. You can even sell products at a discounted rate to get rid of them, it’s all about balance.
Conduct Customer Credit Checks
If a customer doesn’t want to pay in cash, conduct a credit check. Always. This is especially important before you sign them up for the long term. If the client has poor credit, it is fair to assume that you won’t be receiving prompt payments, which will disrupt your cashflow. Hold off on that urge to make the sale and always make sure that this is a secure deal to make in the long term. Questionable credit clients should be set to a high interest rate to ensure your own security.
Lease, Don’t Buy
This goes for equipment, real estate, supplies and anything else you can think of. Although leasing may seem like the more expensive option, you don’t know where your company is going in the near future. Don’t become tied down. If you do, you’ll have to pay out a whole lot more when all is said and done.