Let's Be Clear When It Comes To Business Cash-Flow
Business can be a real simple formula to navigate when done right. It’s based on your expenditures, your profits and your revenue. Simple as that. Cash-flow can play a huge part in this, as a business needs funding behind it to keep functioning. In some ways you would expect that profits should surely cover all of that, but sometimes this isn’t the case. That is because businesses do need to expand, and sometimes you need to speculate to accumulate which translated means spending money to make money.
However, many business owners can become less thrilled with the prospect of managing their cash-flow and can make big mistakes when it comes to running their business this way. However, a focus on this area can work seamlessly with other aspects of the day to day running of your business, and just focusing on some of these areas can really improve the productivity of your business. Not to mention increasing the cash that is coming into it. I wanted to share with you how you can become more clear on cash-flow within your business and hopefully enable you to make some big improvements for the future.
Are you pricing your products and/or services right?
One big factor when it comes to looking to your cash-flow situation is to analyse what is coming into your business daily, and one huge area of this is the sales your business is generating for the service you provide or the products that you sell. How are the sales figures? Could they be better? If you seem to be happy with the level of sales being generated than one area to focus on could be the cost in which you are selling them? Are they priced to little within the market? Could you be making more money in some way? However, it is important to ensure that you get this right when it comes to pricing. Being too affordable could mean that consumers don’t take your product or service seriously, or don’t deem it to be value for money. Pricing too expensively could mean you lose business.
Take a look at your inventory and manage it more effectively
Another thing you can do to improve your cash-flow is to monitor your inventory more effectively. This is when analysing what products sell more effectively and what doesn't could help you to keep track of what best to keep in stock, and what you don’t need such a big supply of. Of course, this means less spend initially, and enables you to only spend what you need. It’s important to regularly analyse this data to ensure that you are not spending money when you don’t need to be. After all, any cash your business generates is best staying with you than being spent for future sales that may or may not happen. There are management companies that can handle this sort of service for you, if you would prefer to outsource it. But it would be recommended to ensure that you can justify that cost as well out of your business.
Be in control of what comes in and what comes out
Cash-flow in your business means being in control of what is coming in and what is going out. Sales generated online or through your shop, for example, is something that happens but it isn’t necessarily something you have control over. Invoicing out to the trade for stock or services you have provided can be controlled a little better. You find that many invoices offer a thirty-day payment window and any other business who is taking control of their cash-flow will pay it at the very last moment to keep the money within their business. However, invoice finance could resolve that by sending a copy over and allowing them to pat you the funds. They then collect the funds from the company/person you invoiced. Equally, it is also worth ensuring that you only pay for things that have been invoiced to you as and when you need to, keeping the funds in your account for as long as possible. Someone in charge of accounts can ensure that this gets implemented properly.
Increase your marketing focus and generate more business
Finally, one last focus would be your marketing. After all, more business generated into the business is always going to help keep the cash-flow game strong. So work on social media campaigns and advertising opportunities to ensure that you make the most of the opportunity you have to increase your business share in your industry.
I hope this has helped you become more clear on business cash-flow.
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