As a startup business owner, it can be hard to establish a name for yourself. One of the early challenges is that you are initially relatively unknown to the market, with an accompanying challenge typically being that you don’t have enough resources and network connections to build the profile you need.
This is the reason why many startups often don’t blossom into a sustainable business. Aside from the early lack of financial resources, there is the harsh reality of ensuring that you have found a way to differentiate yourself from your competition.
Cash flow strain is another one of the most common difficulties for many small business owners. However here are a few simple tips that can help to increase cash flow for your small business .....
1. Accept different modes of payment.
Making the customer’s purchasing experience as hassle-free and efficient as possible will enable better cash flow. This includes sending out your invoices immediately and also accepting various modes of payment (whether through credit, PayPal or cash on delivery). This gives the customer more options to settle and they can choose which is the most convenient for them - making transactions with you easier and faster.
2. Implement “pay on time” incentives.
One way to motivate your customers to pay right on time is to implement incentives whenever they do. This can be through small discounts or rebates whenever they pay on time (ie. before or on due date). Additionally, you might consider implementing penalties for customers who pay late.
3. Affordable marketing .
Obviously improving sales will improve your cash flow. This can be achieved either by selling more to your existing customers - or by increasing your customer base. Winning more customers means thinking about how you market your business and how you will stand out from your competition, so as to be "front of mind" for your customers.
However, haphazard marketing and promotions can easily drain your business capital and expenses - but by using affordable and targeted strategies, you can maximize your sales return.
One way is through content marketing where you aim to inform and educate customers about your industry and establish yourself as an authority in that niche. This type of marketing is more affordable and it can give you high returns when it is done right. An increasing number of businesses are using social media marketing to communicate and engage with their customers more effectively.
4. Keep track of your expenses.
If you have a hard time maintaining records of your cash flow and expenses, it is usually best to hire an accountant or book-keeper to take responsibility for that. Getting the right accounting program or app for tracking and reporting your finances will make your life easier – and make tax time less stressful.
It is important not just to accurately record your cash inflow and outflow – but also to monitor this regularly. This helps you measure your actual return on investment - and to determine whether your operating expenses and promotional tactics are in any way worth it.
It is also important to be able to separate your personal expenses from actual business expenses (which is usually mixed up when you run a small business).
5. Cut costs - wisely.
You can improve cash flow by reducing operating expenses in your business. However be careful that in a frantic zeal to cut costs, you don’t strip away what could be important drivers of your business. Sometimes you’ve got to be willing to spend money to make money…….. For example, you can cut costs by no longer doing any advertising, sponsorship or promotions – but it’s likely your enquiries and leads will eventually start drying up……. So, it’s all about the wise pruning of expenses.
Maybe you can look at negotiating better deals with your suppliers. See if you can get a better rate for example from your power company - otherwise consider changing suppliers.
Another idea to consider is getting shared office space at a lower cost – instead of leasing your own private office or premises. A novel idea is whether you might allow staff to sometimes work from home on certain days (to save on phone and power bills).
In closing, let me say that being a startup entrepreneur is not easy, especially if you lack experience in things like accounting, marketing or doing sales projections. But with the right preparation, a positive mindset and a desire to continue to learn and improve, then these challenges can be overcome.
Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She is an entrepreneur who aims to assist other aspiring entrepreneurs in finding the best office space for their business. You can check out her company here: -FindMyWorkspace