So, you’ve decided that 2019 is going to be your year. Business growth is your objective and you plan on turning your small startup into a business big shot. But, all your ambition can come crumbling down if you do not realise this one simple fact: no capital, no growth.
The hard truth is that your small business will grow faster, and achieve its goals sooner, if it has access to sufficient financing. And if you don’t believe us, then you had better check this study out by our friends over at Finmark Trust. When a business has access to finance, it helps improve cash flow and, in turn, that enables you as the business owner to invest further in your company’s growth.
But, before you go throwing money at your business for global expansion, you are going to need to have a hard look at your cash flow. And, if you are cunning enough, you’ll be able to outsmart any lingering problems there may be. Here are 5 tips to beating your cash flow problems and building a bigger, better brand.
1 Automate Your Invoicing Process
The quickest way to ensure you don’t hit the red zone is to have money coming into your company. There are plenty of pieces of software on the market that can help you track the jobs your team are busy with, and once they are complete, can remind you to send invoices to clients.
PRO TIP: Before commencing work with a client, find out when the optimal time is to invoice them. Aligning your invoices with their cash flow cycles may mean that they will be faster at paying what they owe.
2 Do a Business Audit
Do a complete audit on your past expenses. Perhaps there are a couple luxuries you can cut back on. Here are a few things you should keep an eye on:
- Software subscriptions: antivirus, Microsoft Office, Spotify, work tools and more. In the age of tech, those R50 per month costs can add up fast. Make sure you are not over paying for nice-to-have expenses. Also, see if paying annual subscriptions works out cheaper.
- Discretionary expenses: coffee dates, office supplies and more. Make sure you’re not abusing the system with the small stuff.
- Insurance premiums: make sure you review your policy annually. And remember, ageing assets usually mean cheaper premiums.
3 Prepayment or Volume Discounts
If you are nervous about not hitting your monthly targets, turn to your existing customer base and offer them a prepayment discount. This means full payment upfront for your services.
In order to successfully execute this, ensure you target clients you have a demonstrated history with. If they trust you, they will understand the value of paying for your product or services in advance.
And of course, if you can also offer volume discounts – the more they order, the bigger the discount. This works well for larger clients, who would have inevitably will purchase large amounts of stock from you anyway.
These are just a few tips that you can use to outfox and outsmart a cash flow crisis. But, if you want a more in-depth look at how you can handle your finances, get in touch with our team today.