Cash Flow Tips Part One
Improving your Cashflow
An accounting professor once told us, "Businesses don't have cash flow problems; they have marketing problems." If you're trying to improve your cash flow, you need to improve your marketing, too!
These tips can help all businesses, from start-ups to mega-corps, improve their cash flow.
Get major deposits from your customers at the time of project acceptance.
Offer discounts to your customers for fast payments so that you're not waiting 45 or 60 days.
Reduce cash expenditures on surplus staff and use subcontractors when needed.
Divide large projects into smaller ones so that you can complete them faster and get paid sooner.
Don't buy assets, rent them or lease them.
Contact all of your existing customers and remind them of your value and full product and service list.
Ask your customers for referrals and follow-up fast.
Provide value such as free articles to build your credibility and accelerate the sales process.
Use various cost-effective processes such as technology (web-site, blog, ezines) to distribute your value and attract new or repeat business.
Factoring accounts receivable provided that they're not margined or collateral for the bank's line of credit.
Ensuring any capital purchases are funded with term loans instead of paid out of working capital.
Funding any recent capital purchases with a sale/leaseback
Action Steps
Focus on the velocity by accelerating the inflow and slowing the outflow of your cash.
Focus on the volume by ensuring that your activities are prioritized and promoted based on their profit margin.
