Have you started your own business, and money is flowing out faster than you like? Or you can’t seem to get on top of your bills?
According to our research, 60% of businesses fail in the 3 years largely due to poor cash management skills or a lack of understanding of cash flow. Here are our top 5 tips to stop bleeding money and start increasing your cash flow.
1. Take a good hard look at all of your expenses.
List out all of your expenses for the week, month and year. List everything, and we mean EVERYTHING that you pay for in your business.
You will have client meals, sneaky coffees, subscriptions, programs, software, apps etc., all of these will be costing you a pretty penny, and it’s time to tighten the belt and let go of the things you don’t need. Think Marie Kondo for your business, kiss it and say goodbye.
1.1 Review your utilities.
Each company will be paying for electricity, domain names, internet, insurance, and so on. Now is the time to review your utilities, shop around for the best price, better yet, ask your current provider to give you the best price.
2. What is your ROAS?
So we’ve heard the term, “You need to spend money to make money”, right? But are you boosting posts on IG with no real plan? Or are you spending money on Google Ads and SEO, but you can’t see any benefit or return on any of your efforts? It’s time to look at what’s giving you the biggest bang for your buck. If you are getting a solid return on your ad spends, keeping pushing. If you are not, it may be time to pause your efforts until your cash flow is flowing a bit stronger.
3. Consolidate your repayments:
Are you repaying your loans, or do you have several loans from different sources? It’s always great to consolidate your loans and get one reasonable low rate so that you can save this way!
4. Lease, don’t buy
If funds are tight, you may be better of leasing committing to significant investments.
It may be best to lease your equipment, space, laptop even, instead of buying. That way, you can see in 3, 6, 12 months the state of play and whether you can or need to invest in the things you need to grow.
5. Set up correct payment strategies
Setting up a correct payment strategy with your clients is a great way to train your clients to pay a certain way and ensure your income flows nicely.
Setup the correct payment terms with your clients
Setup auto-reminders to your clients when they are behind with payments
Provide a small discount for early payments as an incentive to pay ahead of time
Invest in a good accountant (oh hey there!). You may think this is another cost. However, if you choose the right accountant, this investment should save you extra business costs.
Contact us today to learn how to help get your cash flow back on track and save you money.