Hit Tough Times? Keep your Cashflow Strong
Small businesses are particularly vulnerable in tough economic times. How can you keep your cashflow strong?
When sales are slow, overheads and salaries still need to be sorted. Pre-planning and being proactive can help you weather tighter economic periods and allow you to continue to thrive.
Ensure you have a clear picture of your payroll and any other planned expenses that must be accounted for.
If there’s even a possibility of a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.
Minimise the stress of cashflow
Invoice early – Send any invoices you can, in advance, if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal if they book services or make a purchase from you in advance.
Chase payment – Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter – talk to clients and chase invoices.
Talk to suppliers – A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
Review Inventory – Can you find a cheaper supplier locally to avoid the shipping costs or discuss alternative products that allow you to reduce expenses?
Review your costs – It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions, or purchases to which you can decide on an alternative approach.
Talk to the bank or tax department – If cashflow is tight, ensure you have conversations early, so you have everything in place to see you through.
We can help you implement strategies to protect your business for the long term and help you alleviate cashflow worries and keep your cashflow strong through tough times.