All small-business owners know cash flow is king, and when the company has some extra dollars to throw around, things are going well, but when the pockets are empty, the firm may be struggling. Preparing for growth is especially important for owners of small firms who have do some financial forecasting to manage their products and inventories. A recent article for Fox Business shared some strategies small-business owners can use to make sure they have enough cash at all times.
Don’t be afraid to bill customers
Many small-business owners make the mistake of billing their customers only once or twice per month. But they fail to realize is that if they don’t get paid, they won’t have the cash flow necessary to make investments or pay their own bills. Sending out invoices weekly and reminding customers to pay will not only allow owners to have some extra money to play around with, but it will also show customers that a company is serious about their business. Creating a payment program with clients is another way to have a little extra cash floating around.
Establish multiple sources of funding
The economy has made it difficult for many small-business owners to acquire the amount of funding they want for their company, but some have made due with credit lines from banks and investments from others. Having a relationship with many banks and credit lines is something all small-firm owners should try to do. It’s important for small-business owners to have a number of different options for funding because certain lenders can fall back at any point. This is why business insurance is a good idea – because it funding suddenly is become no longer available, the company remains protected.
Settle on a few ‘staple’ products
One way small-business owners can run into trouble is by producing too many of their products with several different variations, which can cost their company too much money. A better strategy for small-business owners is to streamline product lines and avoid a more complex collection of items. Settling on a few different products that evoke the highest sales numbers will give owners of small firms the ability to have some extra spending money at the end of every month.