A cash flow problem can cripple your business, causing you to lose customers and suppliers alike. Here are some tips to help you fix your cash flow problems and get on with running your business.
Sales issues – If you aren’t selling enough, cash flow issues are inevitable. There are three main reasons why you aren’t selling; firstly your prices may be too high. Secondly, the market may not be receptive to your product. Finally, you may not be reaching the right audience from your marketing and sales initiatives.
High expenses – If your sales are good, but you are still struggling, look at your costs and how you can reduce them to manage your money better.
Poor collection efforts – If you are not able to collect your money on time you will then not be able to balance your cash flow. Look at how long you take to collect what is due to you and how you can reduce this time.
Once you know where you are going wrong, you can look at a few of the steps below to help you improve your situation in the short run.
Run a flash sale – A quick flash sale will help you get money in a short period. If you sell physical products and have healthy margins, this is a good option for you.
Raise prices – Look at raising prices if your margins are not substantial. However, increase your prices slowly to avoid a sales drop.
Tap your line of credit – Asking for help in the form of credit, can be a good way to help your business in the short run.