We came across these Top Tips from Paul Davis of Davis Business Consultants in early December. While not strictly consumer related, we thought they were interesting and thought provoking. So, for this, the 13th (lucky for some) in our series of Top Tips for Irish Consumers, here’s Top 10 Tips to Kick-start Your Cash Flow.
- Stick to your budget. If you don’t have one, make one now. Your budget is one of your key financial management tools for your business. You want to know exactly how much to spend on each large item you purch! ase and when you will have the cash to do it. Your cash flow projection coupled with your forecast will give you the proper timing for making purchases.
- Joint venture with another business. Find a business offering services or products that are compatible with your own and offer to promote each other’s business. For example, if you are selling health food products, offer to cross-promote with a business selling fitness products. You’ll both enjoy increased sales.
- Ask suppliers for credit. If you haven’t done so already, ask your suppliers to extend your credit. Another possibility is to discuss loan or consignment stock from your suppliers.
- Stop producing dated and low profit items. Stick with your core product until sales improve.
- Cut back on stock or inventory. Ask suppliers to buy back stock at cost. Order supplies or inventory on an “as needed” basis. Alternatively, you could contact other small businesses that stock the same inventory as you do and discuss the possibility of bulk purchasing. Also sell off old or obsolete stock at reduced prices to tu! rn your inventory into cash.
- Help your customer and in turn, help yourself. Suppose your customer’s normal supplier has equipment problems and won’t be able to meet the deadline for a very important job. Connect your customer with someone you know who could help them out and you’ll be helping your customer, your business contact and yourself! As their cash! flow grows, they have more money to pay you! Alternatively connect your customers with business contacts for their business to improve their sales and in turn cash.
- Bill your clients regularly. Many business owners are so busy selling to new clients that they forget to invoice the clients they have already worked with. Put the task of billing your clients on your calendar and then stick to that schedule.
- Get a retainer for your services before you begin the work. If you are going to be working with a client over a period of time, request some money up-front before you begin to deliver the service.
- Give a discount for early payment. You will be able to collect the money more quickly if you offer a discount for prompt payment.
- Accept a credit card for payment. Although you have to pay the credit card company for this service, having the convenience of a credit card allows the client to pay immediately.
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The complete series listing of Top Tips for Irish Consumers is now available here.