Business cash flow is a critical item in any small or large organization. A business operates in such a way that there are times when there is plenty of cash and other times when cash is in short supply. When you are beginning in business, and often as the business is growing, there is an element of trial and error as you figure out your business cash rhythms. It is not possible to always control circumstances affecting your business. That is the main reason as to why it is advisable for you to have effective plans that allow for extra cash in the event of abnormal occurrences in your business.
Every business has ups and downs, but there are ways that you can increase your cash flow and stop having sleepless nights.
Increase Cash Flow with Sales Promotions
One of the ways of increasing a small business cash flow is by having a special sale promotion. It is important to note that a sales promotion is not just for big businesses. So the question is how you might be able to use special promotions to increase your business sales. For example you may be able to offer discounts on special purchases, or bundle items together, or offer a bonus. You might have an end of year sale or a birthday sale. Another option is to have special promotions that link in with the various holidays in the calendar.
However, before you start having promotions, you need to put the right strategies in place for how the promotion will be carried out. You also need to market your promotion and inform your customers or clients about the campaign. You could do an email or phone or direct mail campaign to existing customers or even advertise.
Increase Prices to Increase Cash Flow
You can also increase your small business cash flow by increasing prices of the products that you sell. But remember to inform your customers on the date the prices are going to rise if it affects them. If you have ongoing contracts, you should also consider allowing customers to renew their contracts before the new prices come into effect.
Increasing Cashflow with Unused Assets
Another way to increase your cash and clean up your balance sheet is to dispose of unused assets in the business by selling or leasing them. Evaluate which inventory or plant and equipment is obsolete or not used any longer in your business operations. You might even have more unused items at home that can be used when cash flow is tight in the business.
In a small business, cash flow is more important than profit, at least in the short term. So make sure you track and manage your cash flow regularly.
Here is a video about the importance of cash flow.