It is perhaps inevitable that almost every business will at some point or another find themselves short of cash. Being low on funds can, of course, be immensely stressful and hindering your business’ growth.
There are many ways in which you can tackle your financial issues head-on:
1. Seriously Review Spending
It is perhaps evident that businesses should review their monthly, weekly even daily expenditure regularly, to see if there are any opportunities to cut costs, but many business owners just don’t do this as often as they should do.
Check old receipts and bank statements at least every month to pinpoint the primary sources of your spending. Is there anything that you could cut back on? Are there expenditures you could cut out altogether?
According to Entrepreneur Europe, a central area where a business mismanage their spending is on the costs of insurance coverage: workers’ compensation, unemployment, general liability, general property and casualty, vehicle, health, and other employee benefits. So it may be worth reviewing how much your business spends on insurance cover and if there are any better deals out there available to you.
2. Make the Cuts
Once you have reviewed your spending, you need to act and make the necessary cuts for your business to recover. Do you hire a professional cleaning team, when in reality you could do the cleaning yourself, or between your staff?
Could you renegotiate your rent or even downsize your office or shop space? On a smaller level, if you have noticed your energy bills to be unusually high, replace old light bulbs for energy saving light bulbs or consider switching energy providers. There are multiple cuts and changes that can be made to reduce monthly expenditure.
3. Ask Customers to Pay Upfront in Advance
This is a useful way to improve cash-flow particularly if you’re a service-based business.
As long as your business has a good reputation, you should have little difficulty with asking customers to pay in full upfront. Many customers actually prefer paying up front, so that they can budget adequately for the remainder of the month.
4. Consider Alternative Funding Options
An innovative funding alternative that many small businesses now opt for, to solve short-term cash-flow problems, is a merchant cash advance. Your business will receive an instant cash-boost in exchange for a small percentage of your future debit card and credit card sales. It is one of the fastest ways in which you can increase your business’ funds, and it is far more accessible than a bank loan.
Reasons to get a merchant cash advance:
- There is no interest to pay. Rrather than paying interest on the sum borrowed, you instead agree with the lender a fixed fee upfront. Consequently, you will know exactly how much you will have to pay back, making future financial planning much more straightforward.
- Repayments are also flexible and never fixed. If you earn less one month, then, in turn, your repayment for that month will also be less, so the amount you pay back is always in sync with your business’ performance.
- Applications for a merchant cash advance are made entirely online, and within minutes you will know whether or not you have been accepted, so there is no waiting around, and approval rates are high.
Those are just several of many reasons to get a merchant cash advance, so it is an option well worth considering if your business is particularly strapped for cash.
5. Try to Obtain A Business Discount
Many suppliers will offer business accounts and business discounts if they know they are guaranteed orders for the foreseeable future, so if you haven’t already it may be worth re-negotiating with any of your current suppliers to see if you can get a better deal.
6. Sell Unused Goods
Many businesses accumulate goods and appliances in the beginning that in the long-run are actually very rarely, or perhaps even never, used.
If you can identify any valuable goods in your business that realistically you could sell on, and still operate at the same level, this would be a big help in solving cash-flow problems. For example, paper-shredders, toastie makers, even fancy coffee machines that aren’t in daily use, are great items to upload to eBay to try and make a bit of extra cash?
7. Consider Reducing Your Own Salary
While this is perhaps not a popular suggestion, reducing your salary for a few months while trade picks up again will allow for your business to benefit financially in the future.
Cutting your salary rather than the salary or hours of your staff members will help keep up morale within the workplace and keep your employees feeling secure and stable within their jobs. There are a vast number of ways in which you, as a business owner, can tackle any financial struggles that you and your business face.
Smaller strategies, such as seeking out discounts and making cuts to your expenditure, will surely see the improvement of your financial situation with time and patience, but for a faster track solution, an alternative funding solution, such as a merchant cash advance, can provide more instant financial relief for your business.