Tips to Manage Your Cashflow
Mon, 2 Nov 09
Cashflow is an important vital sign for businesses, so it's important to ensure you're keeping the cash flow river running. Here are some easy tips to manage your cashflow better...
Offer Incentives to Pay Early
If you change your payment terms from 30 to 14 or 7, you may need to offer your customers something of value to switch to the new terms.
Make Payment Easy
Do you offer BPay, credit card payments and the like? Sometimes offering an easy payment method is enough to encourage customers to pay in a timely way.
Setup a Quality Brand from the Get Go
By setting up a quality brand, you will be able to develop stronger customer relationships and charge more for your business. People are often willing to pay a little extra to deal with brands they know and trust.
You Don't Have to Follow the Industry
Just because your competitor’s payment terms are flexible doesn’t mean you have to be. Even more importantly, just because your competitors charge less doesn't mean you have to be the cheapest either.
See if Customers are Willing to Share in Your Cost Savings
Sometimes, customers may be willing to buy in bulk from you so that you're not forking out extra money on inventory. Also, if you’re a service based business, you may want to look at ways to manage demand so you can make better use of your fixed costs.
Focus on Key Customers
Looking after the big customers will keep them hanging around with your business longer - often giving your business some stability as smaller customers come and go.
Don't Put All Your Eggs in One Basket
Despite the previous point, if your business has one or two big customers supporting it, you may get yourself into some trouble when things get shaken up. Finding new customers will allow you to diversify and minimise your risk.
Aim for Quality over Quantity of Business
It's often hard to avoid the allure of business growth. Many owners make the mistake of taking on quantity rather than quality business, but it's a lot better to have healthy and personal client relationships.
