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Essentially, when paired down to the heart of the matter, there are fundamentally two options when wanting or, indeed, necessitating to increase your cash flow, be that your personal financial situation or that of your small business.
Frankly, these two options are either borrowing the money or making money, and you are most likely to agree, the latter is much the preferred option.
What Does ‘Cash Flow’ Actually Mean?
Cash flow is essentially the net sum of cash and cash counterparts being regularly transported in and out of your business, with any money received signifying inflows and any money spent representing outflows.
There are three principal financial statements that businesses use to regulate, organize, and keep track of their finances:
- Income Statements
- Balance Sheets
- Cash Flow Statements
Lack of accessible and transferable cash is the primary reason why small businesses fold and fail, no matter how well other elements of your business model have been put in place. Therefore, cash flow is a particularly heightened concern when running a small business, and it is imperative that you spend time, and pay due attention in assuring your cash flow is in a healthy state.
An area of small businesses that is unfortunately often neglected, to their own detriment, is that of just how much is spent unnecessarily each on energy bills.
The simplest and most cost-effective way of reducing how much your small business spends on energy bills and subsequently increasing your cash flow is to contact a professional, established, and experienced company, such as Utility Bidder. They offer a fully comprehensive service finding you the best business gas and business electricity prices. Working with the top utility and energy suppliers across the United Kingdom, such a company will offer you the very best and most cost-effective utility price package.
Other, simpler, and quick-fixing ways of immediately reducing your energy and subsequent outflows in larger and smaller businesses alike include conducting a full energy audit, replacing all normal lightbulbs with energy-efficient alternatives, and installing motion detectors light dimmers. In addition, ensure your thermostat is programmed to a constantly comfortable temperature to maximize your air conditioning’s air condition system.
There is a wide plethora of daily small business expenses you will indulge in throughout the day-to-day running of your small business, and you will be surprised how quickly these expenses quickly mount up over time. If you concentrate on reducing, minimizing, and in some cases entirely eradicating even one or two outlays, your cash flow will naturally increase.
Naturally and exceedingly obviously, your business would be entirely free of debt in an ideal world. This, however, is highly unlikely, especially when you are running a smaller business, but take care not to be tempted by suppliers who will attempt to overwhelm you with interest deals. Wherever possible, pay for everything upfront and in full to avoid racking up debt and subsequently increasing your outlays.
Simple and speedy changes include forgoing the daily coffee run and instead investing in some good quality coffee that can be kept in the office and ensuring every section of your small business’s office space, however compact, is utilized and maximized full potential.
There is less and less reason to physically print every document on every single forwarded email in the digital era of the modern world. However, printer ink is not cheap, not to mention printer and copier maintenance, so it would be wise to minimize how much printing you do and instead keep digital copies of important paperwork.
The dreaded paperwork, the bane of even the most professional and successful small business owners, is the inevitable, copious amount of paperwork accompanying the job. To increase cash flow, it is vital to organize all your business and personal paperwork thoroughly. For example, sales and invoices are essentially the backbone of any business, particularly a smaller one, and it would be extremely prudent to ensure you send out every invoice immediately after the job has been completed or the service has been provided.
Unfortunately, the organization is imperative for a successful and long-term business model and to increase and maintain that increase in cash flow. This rule particularly applies to your small business records, and you must keep all your paperwork correctly filed and meticulously up to date.
Organization in business is also one of the most important key elements of being a successful company manager, and no matter how small your workforce, an organized manager makes for a relaxed and competent team.
Expand Your Sales Market
Increasing sales is quite clearly the most effective and obvious way to increase the cash flow to your business, and the techniques for doing so differ greatly from smaller businesses to larger, more all-compassing companies. Essentially, it would be best to position your small business as strategically as possible to compete as solidly as possible in the local market.
One of the best ways is to target local business searches and information points, and there are several tried and tested ways to do so. These include but are by no means limited to.
- Create a local listing on Google or similar search engines which automatically allow you to manage the main information pages whenever customers deliberately search for your products or services
- Start a blog for your business that specifically and deliberately mentions the local area in which you are based
- Offer a loyalty scheme for existing customers and a limited promotional campaign to entice new customers
- Use local social media sites to promote and advertise yourself – for free!
- Print basic and affordable business cards and leave them in local shops and other businesses
Other proven effective ways of increasing sales for small businesses include creating a mobile-friendly application for both Apple and android phones, creating, and maintaining active social media accounts, particularly Twitter and Facebook, and enabling Google Alerts to keep track of customer feedback.
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