BUSINESS STRUGGLING WITH CASH FLOW ISSUES? HERE ARE 3 THINGS YOU CAN DO
If you’re running a business and have a steady stream of clients, chances are you’ll experience cash flow issues. This is perfectly normal, and something that can be remedied if you take the proper action. However, depending on how long you’ve been in business, or your personal/business credit situation, options might be limited. But there are things that all business owners should consider if they want to keep their business afloat and be able to fulfill their obligations. Here are some options that you could look at if you’re experiencing cash flow issues.
Consider Invoice Factoring
One of the best ways to deal with lack of cash flow is going for invoice factoring. Invoice factoring allows you to borrow money against invoices that are due at a later date. The best thing about it is that you can apply for invoice financing even if you have low or no credit at all. It’s your debtors’ credit that will be the most important, so this is a great option if you’re limited in your options. It’s also one of the best ways to keep your operation running if you have a few major clients who tend to drag their feet when it’s time to pay.
Trim the Fat
If you’re operating from a facility, then chances are you’re overpaying on certain things. Just making a few adjustments could allow you to cut your overhead costs, and have a little more room to breathe.
One of the simplest things that you can do is try to negotiate rent with your landlord. If you’ve been a long-time tenant, they’ll most likely be willing to strike a deal with you if you explain the situation. You could also consider moving to a smaller or cheaper location, or even consider sharing space with another company,
Try to negotiate deals with your energy provider as well, and don’t be afraid to look around. Eliminate all energy vampires – the appliances that continue to use energy even when not in use. One simple way to do this is by installing energy strips that will allow you to cut these appliances off easily at the end of each day. Also consider energy efficient options like LED bulbs, as well as heat recovery ventilation and heating systems.
Use Cash Flow Forecasts
Cash flow forecasts are one of the most powerful, yet misunderstood tools when it comes to foreseeing expenditures, payments, and receivables. One off cash requirements that could destabilize your business could be recorded, allowing you to prepare in advance by taking appropriate action, or by searching for financing ahead of time. However, for them to continue being effective, they need to be constantly updated, and figures compared to see how accurate they were.
Cash flow issues can be distressing, but it doesn’t have to be that way. Make sure that you consider all the solutions in this article, and try to find ways to limit costs while using the right financing options.
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