Your business has been open for a while and things were looking good. You were getting sales and money was coming in hand over fist. However, somewhere down the line, you ran into cash flow problems.
What looked like a profitable quarter has turned into a never-ending struggle to keep your company afloat. How can you get out of this rut and turn things around?
Take a look at seven solutions you can use to solve your cash flow problems.
1. Raise Your Prices Annually
The first thing you can do in order to bring more cash to your business sounds simple but it can be tricky. Raising your prices can be a touchy subject for business owners.
This can lead to a potential loss of one or more clients if they feel like your rates are too high for their budget. It is definitely a risk but one you must take if you are constantly coming up short on cash.
If you do have the opportunity to raise your rates by 15 to 20% and your clients don’t have a problem with paying that much the revenue will quickly help turn things around.
You can also change the rates are specific services which will also increase their value in the eyes of customers.
2. Trim Expenses
The next option to increase your cash flow is taking a hard look at all of the expenses for your business. (Here’s where you can learn more about managing your cash flow) Do you really need to pay for a vendor subscription that isn’t bringing a good return on investment?
Chances are there are a number of ways you can cut back cost without slashing salaries or flat out firing employees. Analyze everything you are purchasing, and find alternatives to make things cheaper when running your profit and loss reports.
3. Run a Promotional Sale
A quick way to boost revenue is by running a promotional sale (also knows as a flash sale) for specific products or services. If you create a flash sale for one or more products at an exclusive price, you may be able to double or triple your sales for that timeframe.
This could be as simple as cutting the price of a product by a percentage for a few days before it reverts back to the normal price. You can even get sales for the product at the normal price because the awareness of the promotional sale will still be in the minds of consumers.
They will be upset that they missed out on the opportunity to purchase the product at the sale price but will still make the purchase. So consider running a flash sale as one of the creative ways you can use to increase your bottom line.
4. Work Out a Payment Plan for Expenses
If you find yourself struggling to pay bills from vendors it may be time to consider speaking to a rep directly.
You can explain your financial situation and even work out a payment plan with them so that you can keep their services while paying off the balance. but not spend as much per month.
This shouldn’t be done for all of your vendor bills as the main ones should always be paid in full (rent and other utilities), but can help get you out of a bind.
If you can work out a payment plan that will be a little bit of extra cash that you can use towards something else.
5. Setup Online Payments
If you don’t want to deal with the hassle of waiting for checks to be mailed out by your clients or customers, the next option you can do for your business is setting up online payments.
These payments can be set up through a number of credit card processing companies or other vendors. PayPal is one of the most commonly used online payment systems used by small businesses today.
This allows you to receive payment instantaneously and you also will not have to wait for any checks to process through your bank over a specific time period.
You can also use the services to your advantage for any customers visiting your website.
Once you get your payments set up online cash flow should start up again.
6. Re-Negotiate Contracts With Vendors
If you don’t carefully read the fine print of a contract it can be detrimental to your business.
The fine print clauses in the contract can make it hard to get out if you are not happy with the services provided by the vendor. If the services are not what you were expecting, but you are unable to completely get out of the contract we highly recommend speaking to a management representative.
The management rep can work with you to renegotiate the terms of the contract. This could include shortening the length of it or taking off some of the services completely to reduce the total bill.
If you are up for negotiating and won’t back down at the negotiation table then try to rework the deal you originally signed.
7. Apply for a Business Loan
Another quick option can be applying for a small business loan. These loans can be approved relatively quickly (sometimes in as little as 24 hours) and could certainly get you out of a tough jam.
The only major drawback of these types of loans is the high APR, but in the long run, it may be cheaper than applying for a loan with a lower APR and a longer payback period.
If you have the credit to apply for a loan then keep this option in your back pocket if the others aren’t readily available.
Solve Your Cash Flow Problems Easily
Now that you have seen some of the best ways to stop your cash flow problems, which ones will you try to do first?
Are you going to run a promotional sale for a quick spike in revenue? Or will you try to trim expenses to improve your bottom line?
Let us know below and don’t forget to follow our blog for more information about managing your money!