Small Businesses: Get Your Cash Flowing Fast
There are few more empowering things you can do in your career than starting your own business. What better way is there to thumb your nose at a job market and corporate landscape that’s riddled with inequalities?
In an era where women enter the job market experiencing casual misogyny from their bosses and colleagues, pregnancy discrimination and a gender pay gap that the World Economic Forum predict may take over 200 years to close, it’s not surprising that so many bright, resourceful and determined women eschew the traditional career path for entrepreneurship, whether that’s through setting up her own business or working for herself as a freelancer.
That said, no matter how small the nature of your operation, the path of the entrepreneur is littered with obstacles. Job security, paid vacations and sick pay are now things of the past and it’s up to you as the CEO of your own business to pay yourself a salary that reflects the effort you put into your operation, pays your bills, but also helps to facilitate cash flow.
The importance of cash flow
No matter how small your business, cash flow is an essential part of what will keep it ticking over. Your cash flow will ensure that your suppliers and other creditors get paid. It will ensure that you’re able to make capital investments that will boost your productivity or output and it will prevent you from incurring debts which can continue to eat away at your margins until you’re running at a loss. But how can you ease cash flow and prevent the stoppages which can bring your enterprise grinding to a halt? Here are just a few ways…
Invest in software and services that will help you out
While spending money to save money may seem paradoxical, it’s important to remember that a healthy cash flow doesn’t always lie in austerity and spending cuts. Sometimes, it helps to invest in software that will make cash flow easier whether it’s through better financial forecasting or more efficient billing solutions. Take a look at what SATbill are doing for telecoms companies. When your software is guiding you, it’s a lot easier to avoid the faux pas that can lead to poor cash flow.
Use invoice factoring
Do you have a client who you know is worth retaining but is late on their latest payment? Do you desperately need a fast payment to keep your own creditors happy yet don’t want to risk seeing a valued client walk nor do you want to incur the added expense of a bridging loan? Invoice factoring can help here. For a nominal fee, an invoice factoring company can get you instant payment on an outstanding invoice.
Throw a one-off sale
While a robust inventory is a staple of a healthy business, it can’t make you money if it’s sitting in storage. If your cash flow is starting to dwindle, a one-off sale can help you to free up some cash that’s been frozen in inventory while attracting a flow of custom to your business. Sure, you might take a slight hit on your profit margin but its a price worth paying for increased cash flow.