Focus on driving sales through promotion While it may seem obvious, creating a marketing promotion to drive cash sales is the quickest way to boost your cashflow. Try to focus on still making margin too as there is no point creating sales that don’t have profit in them. You’re just moving a problem further away rather than solving it. Up-selling is one way to do this – buy two, get a third free, or offer discounts for purchases above a certain amount. Targeting existing customers may be more effective than trying to lure in new ones.
Get rid of slow-moving stock It’s no good having stock clog up storage space for years on end. Selling old stock for reduced prices is a great way to free up space for things that are easier to sell. You may even sell it for a loss if you really want cash in hand.
Take deposits for larger orders This is a great way to reduce risk and underpin sales while improving cashflow. Many companies have a deposit payment policy for orders over a certain amount so. It’s not uncommon.
Chase up invoices There are many reasons why an invoice isn’t paid on time – the customer may have forgotten, they may not have received the initial email or they may not have scheduled payment properly – but sending a polite reminder is the best way to ensure it’s paid quickly. Put timeframes on the reminder and don’t be afraid to pick up the phone either as often it’s the personal touch that gets the dollars in.
Offer payment options Different clients will have different payment preferences. The more you’re able to meet those preferences, the easier you make it for them, and the more likely you are to be paid on time. Does your business take credit card? Do you offer Afterpay or Lay-by? Don’t forget you can also charge a fee as many other businesses do. You can also offer discounts based on pre-payment for a product or service, or bring new clients onto a fortnightly payment cycle.
Negotiate terms with suppliers
If you have historically good credit with suppliers then perhaps consider asking for extended terms. Make a plan before you reach out and know what you want to achieve. Be proactive - contacting them ahead of time means they can plan too and in our experience this always helps.
Get your books in order
To have the best chance of success should you need to head to the bank or a lending partner you need to ensure your books are in order. Ensure you have a realistic cashflow projection ready (we can help you with this), that your profit and loss, creditors and debtors are up to date. It’s also important to have a plan in place for the future once the chasflow shortage has been overcome - paying debt back, increasing sales and reducing costs are all things you will need to consider.
Make a time to sit down with us and we can help you put a business plan in place, plus the re-assurance we are beside you all the way to ensure you stay on track. Phone on 07 578 5416 and one of our senior team will be able to assist you.