In the last three blog posts, we talked about some ways to improve your top-line revenues and your bottom-line profits. If you follow just a couple of these tips, I think it’ll really help you reach your business goals!
With that said, you already know that revenues and profits don’t necessarily translate into cash flow! Let’s face it, “cash is king” in a small business. In fact, you could literally thrive with smaller revenues and profits if your cash flow is abundant.
So…let’s give you a few tips on improving your cash flow:
1. Create a receivables system. Far too often we send an invoice monthly and cross our fingers! Figure out a SYSTEM of what to do at 30, 345, 60, 75 and 90+ days that is unbendable. Review your list weekly. Combine email, phone, personal visits and collection letters.
2. Offer discounts on sales/receivables for cash, 7-day and 14-day receipts.
3. Start charging interest on your receivables.
4. Negotiate longer terms with your vendors. Everyone is willing to work with you right now!
5. Renegotiate bank loans to extend them and lower payments.
6. Track and estimate cash flow. If you do not have a tool to do this, we have some that are very simple to use.
7. Watch that inventory. Stock as little as possible and consider what items you can drop-ship. Sell off inventory that has been sitting around!
Those are a few of the tips that we wanted to share with you. Obviously, there are many other ways to improve your cash flow, but if you just can do one or two of these, I think it will really help!
As always, if you have any questions or would like some help, please do not hesitate to contact me, Michael Andersen, at any time!