4 ways to boost your cash flow and keep it healthy

Healthy cash flow is your most important focus when running a business, because it can stop everything in its tracks if it doesn’t balance out.

Most small businesses (plus some big ones) face cash flow problems, and it’s the reason 7 in 10 companies failed between 2014-2016. Have a read of these four tips - they’ll help you spot where you’re losing money, and where you could be making it.

cash flow boost

Make sure your cash flow forecast is spot on

Your cash flow forecast prepares you for how much you’ll make and what your costs will be over the year. This is essential if you want to know if you can afford to take on new staff, expand into a different market, or develop more products. To pinpoint upcoming issues, you need to see how your incoming cash and outgoings affect each other.

The important stuff to include:

  • Payments you’re going to have to make over the next year (that includes stock, equipment, staff wages; the lot).
  • How much money you’ll receive from customers/clients and when.
  • Any other earnings (e.g. investments, interest on savings).

Figures from previous years paired with your cash flow forecast will help you see trends. Is this March busier than last March? Did you make the most of the run up to Christmas last year? Could you improve it in 2018? The numbers should be able to tell you what you need to do to keep your cash flow healthy and your business growing.

Look at your prices and overheads

For many small businesses, pricing is a sensitive subject. Your most loyal customers or clients can sometimes take the news of a price increase quite badly, but you can’t afford to stand still when your costs go up.

  • Check out the competition. You don’t have to match them, but you do need to be aware of customers’ alternatives. If you’re overwhelmingly more expensive, you’re likely to lose out.
  • Change suppliers if your overheads are too high. Check out other suppliers and see if switching would cut production, labour, or manufacturing costs.
  • Consider dynamic pricing. Let your prices change depending on demand, season and competition. You choose the parameters and the pricing service will do the work for you.

Ditch marketing channels that aren’t working

keep cash flow healthy

Whether you’re using Facebook ads, Google AdWords, or traditional advertising, cost-per-lead is one of the most important figures to keep track of. When you spread your budget out over different channels, it’s easy to lose track of which is actually getting you more business, but you’re potentially hurting your cash flow if you leave it to its own devices.

Marketing and advertising channels usually need some time to be tested and develop, but if one is costing more than you’re comfortable with, move your budget to a channel that encourages your most attractive prospects to click, learn more or enquire.

Use online invoicing tools

Unpaid invoices are usually the main cause of cash flow problems for British businesses, and pretty stressful to endure. To get paid faster, sign up to an invoicing software that automates everything from sending to chasing.

What your fancy new invoicing tool can do:

  • Send read receipts. Just like WhatsApp’s two blue ticks, read receipts tell you who’s seen your invoice and who’s opened. There’ll be no more ‘Just checking you got my invoice…?’
  • Automatically remind clients to pay. Instead of chasing them yourself, you can set up automated emails to remind the client or customer if a payment is more than so many days late.
  • See who’s a credit risk and who isn’t. See what a client or customer’s credit score is, and find out how likely they are to pay on time.  

Solna does all this fancy stuff and more, making fiddly admin no longer your problem.

Read our latest Guide To Finance And Accounting For Startups And Small Businesses to learn more about keeping a healthy cash flow and your finances in check!

Try it out now and send beautiful invoices that are tracked until they’re paid. 😉


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