Cash flow is absolutely EVERYTHING when you are running a business, regardless of whether or not that business is more established and a veteran in its market or a brand-new startup clawing and fighting against the competition.
Unfortunately, for one reason or another, a lot of otherwise really smart, really savvy, and really strategic marketers and business owners just don’t pay as much attention to their cash flow and aren’t doing everything they can to maintain a positive cash flow.
Here are five tips and tricks to help you do exactly that while avoiding all the hassle, headache, and anxiety that a negative cash flow – or an unknown cash flow – situation causes.
One of the most important things you can do, not only as a small business owner but as a smart person in general, is spend strategically and pay very close attention to where your money ends up going. As a business owner, you need to spend strategically, investing in your business rather than just buying things you may or may not need to grow.
Establish legitimate lines of credit
There’s nothing worse than finding yourself in a bad cash flow situation and then trying to go out and land credit. This is a blood in the water kind of situation that banks and lenders can smell, and you’ll find it’s a lot harder to get the credit you need when things aren’t going well. This is why you’ll want to set up solid lines of credit when your cash flow is at its best, preparing for downturns that are inevitable in any business operation.
Stay on top of your receivables
Your Accounts Receivables is essentially money that you have made without actually collecting yet – money that your customers or clients haven’t paid up just yet – and you need to pay very close attention to these figures. You need payment plans in place, payment terms that are relatively short and concrete, and you need to make sure that you have a means of collecting on late payments that protect you and your business.
Avoid late fees as much as possible
Late fees can add a considerable amount to your bills, and it’s of the utmost importance that you do everything you can to avoid paying them. Pay your bills in full on time to not only keep your cash flow positive (to have a better understanding of your financials) but also to improve your credit score which is so important for business funding.
Stop giving massive discounts
It can be very tempting to want to cut your prices to cut into your competition or to dominate a market with prices so unbeatable that your customers would have to be crazy to shop anywhere else, but this creates a culture of cutting prices rather than cutting costs that will kill your profitability and your cash flow.
Stop giving away massive discounts just as soon as humanly possible, saving big discounts for very specific and strategic purposes that help you build your business rather than bury it.
About the Author
Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like 5 Ways To Instantly Beef Up Your Marketing Strategy, Productivity Tips from Entrepreneurs and all topics related to Singapore Business, if you are interested about Setting up a company in Singapore visit our website.
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