This Is How To Improve Cash Flow For Your Startup

As an entrepreneur, it is hard to establish a name for yourself. First, you are relatively unknown to the market as of the moment, and second, you don’t have enough resources and network connections to help add up some leverage for the business.

This is the reason why many startups don’t really bloom into a big-time business. Aside from the lack of resources, competition does not also make things easier for startups to thrive in. However, there are a few strategies to help increase cash flow for your small business – some of these include:

#1 Accept Different Modes Of Payment

Making the customer journey more hassle-free and efficient will attract more cash flow. This includes sending your invoices immediately and accepting various modes of payment (whether through credit, PayPal or cash on delivery). This gives the customer more options to settle and they can choose which is the most convenient for them – making transactions with you easier and faster.

#2 Implement More Flexible Payment Terms & Incentives

One way to motivate your customers to pay right on time is to implement incentives whenever they do. This is through small discounts or rebates whenever they pay on time (before or on due date), you can also implement penalties for customers who pay late.

You can also implement more flexible payment terms to accommodate whatever is most convenient for the customer – it could be in 30, 60 or 90-day payment terms.

#3 Make Use Of Affordable, Targeted Marketing

Marketing and promotions can easily drain your business capital and expenses, but by using affordable but targeted strategies, you can easily maximize your sales through this. One way is through content marketing where you try to inform and educate customers about your industry and establish yourself as an authority in that niche. This type of marketing is more affordable, but it can give you high returns when it is done right. Most businesses also use social media marketing to communicate and engage with customers more effectively.

#4 Get An Accountant

If you have a hard time tracking your cash flow and expenses, it is best to hire an accountant to do all that. You can also get an accounting program or app to make tracking easier and recordable all in just one place.

It is important to monitor your cash inflow and outflow down to the last cent because this is the only way to know how much your actual return of investment (ROI) is, and if your operational expense and promotional tactics are in any way worth it.

It is also important to be able to separate your personal expenses from actual business expenses (which is usually mixed up when you run a startup). It would be unfair to cut down on employee incentives when the reason for your rising expenses was due to your personal trips and leisure.

#5 Get Rid Of Unnecessary Operational Expenses

Business and operational expenses can affect your cash flow because, obviously, these will be charged to the company. But you can find ways to lower operational expenses to get the most out of your business cash flow.

You can get an office space at low cost but also allow workers to work from home on certain days (to save on electric and water bills). Investing on office equipment such as printers and scanners are however alright (especially if it is very important in the course of business), but there’s no need to buy Ping-Pong tables and expensive decorations – especially since these are not really needed in doing business and will not result in a return of investment in any way.

Being an entrepreneur is quite hard, especially if you are not very experienced when it comes to the accounting of expenses and sales projection. It is, however, recommended to have a reliable credit card ready – just in case when lapses in cash flow or unexpected circumstances arise.

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