Having a healthy cash flow in business is incredibly important, especially for small to medium businesses or those family run. The Australian Securities and Investments Commission’s report into business failures found that 44 percent of failed businesses had inadequate cash flow or high cash use. The report, based on 8354 reports from external administrators, found small to medium-size insolvencies “dominated” insolvency statistics, with 85 per cent of the collapsed businesses having assets of less than $100,000.
Having a poor cash flow can bring your business to a grinding halt. You may find you can no longer invest into your business for growth, suppliers may refuse to provide stock due to late payments, and you may have to reduce the number of your employees.
The federal budget released this week has demonstrated some win’s for small business and quite possibly now is the perfect time to evaluate your financial position and come up with innovative ways to add revenue streams and generate cash. Here are five ways you might consider to improve your cash inflow:
1. Evaluate your current company assets.
Take a look at your assets, both fixed and human. Could you make slight pivots to create a new form of income?
For instance, if you run a coffee shop or restaurant, could you start a delivery service or offer a drive-thru pickup? Should you charge for delivery?
Think about what you currently have and how you can do more with the assets you already have.
2. Use the power of technology.
There are countless apps you can use to serve your customers better. If you don’t have a website, you should consider getting one built if you want to establish your presence online. You might also have online ordering options or online appointment booking for consultations. If you’re a professional services provider, consultations can be booked with tools like Calendly and go virtual through low-cost video conferencing options like Zoom and Go-To Meeting.
3. Sell merchandise.
You might start selling merchandise that is relevant to your business. You can ask your customers to support you through these difficult times by buying a hat, a shirt, or other products. This can work well if you partner with a charity or get your customers input into the merchandise you will sell.
4. Send invoices digitally and offer mobile/online payment options.
With social restrictions and lockdowns, it is important to give your customers a way to pay you without having to visit your office or store. You can find a lot of reasonably-priced invoicing systems which allow you to send digital invoices and get paid online. Drop us a message if you need help with this
5. Offer discounts and promos.
Almost everyone else is having a tough time just like you. So, if you can, you might want to consider offering discounts and special promotions to attract customers even during the COVID-19 crisis.
These are just some of the ways you can bring in more cash into your business. If you want to develop a focused approach and need tailored business advice, contact your concierge today.