Financial management

8 quick money-making wins for your business

- June 24, 2024 4 MIN READ
cultivate a money mindset- man mediatating at desk as money showers around him

If your business bank account looks a little sad, could you be doing something different to give it a boost? Justine McLean shares her top tips to get your cash flow moving again.

You don’t have to be in business very long to know that cash is the all-important business currency and that consistent cash flow is the only thing that matters!

When you have nothing in the bank and business is slow, buying stock, paying bills, and finding money for wages, superannuation, and taxes add another level of business stress you could probably do without. So, if your cash flow is dwindling or your business cash flow relies on lumpy income, here are some sure-fire ways to improve your short-term and long-term cash flow.

 1.    Create a cash flow forecast

 In its simplest form, a cash flow forecast measures the money coming into and going out of your business. For most businesses, the cash flowing in comes from selling products or services. However, cash could also flow into the business through refunds, loan repayments, grants, interest, rebates, commissions, referrals and licence fees.

Cash outflows include all operating expenses, the cost of sales or direct costs, salary and wage costs, loan repayments and tax liabilities.

A cash flow forecast allows you to monitor your anticipated cash flow and plan so you’ll know when you can spend and when you need to save. So, grab a cash flow template here and get started.

2. Review and adjust pricing

 One of the quickest ways to boost your cash flow is to review and adjust your pricing. Does your current pricing cover the cost of doing business, including your salary, super and taxes? Do you add a profit margin on top of your prices? If not, it’s time to make some pricing changes.

While price increases can feel awkward, especially in a tough economy, it’s up to you to ensure that your prices not only cover your costs but also reflect the value you provide.

Even a tiny pricing increase can significantly affect your cash flow. If you can communicate the value or transformation your product or service provides, you’ll likely attract more clients rather than drive them away.

3. Get good at invoicing and make it easy for customers to pay you!

 You’d be surprised how many business owners delay invoicing their clients, so incorporate good invoicing practices in your business. Invoice as soon as the job is complete. If you’re working on a large job, ask for a deposit or take progress payments.

Encourage your customers to pay their invoices before the due date by offering a small discount for early payment. Make it easy for them to pay you by including up-to-date bank details or adding third-party payment services like Stripe, for example. And don’t ignore those late payers — create a process to follow up on unpaid invoices.

4. Reduce expenses

No matter how little you spend running your business, there’s always room for improvement, so take a deep dive into your expenses. What does it cost you to run your business, and where can you save?

From your most significant business costs like insurance and utilities to smaller costs like your monthly subscriptions, it’s time to roll up your sleeves and get to work. Contact suppliers and ask for better deals or better payment terms. Look at your subscriptions; what can you downgrade to a free or cheaper version? Are you doubling up on productivity tools, for example? Can you find one obsolete expense and cancel it? Challenge yourself to tackle different costs each week and you’ll be surprised by what you can save.

5. Don’t let your customers forget about you.

The reality is that 80 per cent of your business will come from 20 per cent of your existing clients, so who’s your 20 per cent?

Remind your existing customers that you’re open for business. Create an irresistible offer that will entice your loyal customers to buy from you again. Consider an upsell at the point of sale or after the initial purchase. For example, if you sell software, you could offer an additional training package. If you run a salon, suggest additional treatments or products. Offering an upsell increases the average transaction value and can enhance customer satisfaction by meeting more of their needs.

6. Streamline your inventory

Excess inventory ties up cash that you could use elsewhere in your business. So, conduct an inventory review and identify slow-moving or obsolete items. Everyone loves a sale, so offer these items at a discount to boost your cash flow, or reach out to your suppliers and ask to return items that aren’t selling. And while you’re at it, keep an eye on backorders so you don’t have stock arriving that you don’t need or can’t afford.

7. Lean into digital sales channels

 Expand your sales channels to include digital platforms. Set up an online store or sell through established marketplaces like Amazon, eBay, or Etsy. Utilise social media platforms and your email list to promote your products and drive traffic to your online store. Digital sales can help you reach a broader audience and quickly boost your cash flow.

8. Streamline operations and improve systems and processes

You’d be surprised how much money is wasted in business due to inefficient processes and a lack of sound systems. So, if your business resembles organised chaos, look at where you can improve systems and processes. What repetitive or day-to-day tasks would benefit from an updated process or by adding tech to help you save time and money? Where can you outsource to a specialist who can do the job in half the time and save money?

Minor improvements in business processes and implementing tech can result in a considerable cash flow boost.

When it comes to improving cash flow, you don’t have to do it alone. One of the fastest ways to get ideas specific to your business is to ask an expert. So, book an appointment with your accountant or a business strategist and get their wisdom on how to save time and money and improve your business cash flow fast.

Improving your cash flow doesn’t always require drastic measures. All it takes is consistency! So, book time with yourself to review and adjust your strategies regularly to keep your cash flow healthy and your business growing. Start with one or two of these ideas and watch the positive impact on your bottom line. Your business — and your bank account — will thank you.

This post first appeared on Kochie’s Business Builders. you can read the original here.

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