USE THESE 5-MONEY SAVVY MOVES TO MANAGE YOUR COMPANY CASH FLOW
When you're running a small business, finances can be fickle. One day you have all the money in the world, and the next you're waiting on that new contract in order to cover inventory. With the level of uncertainty in the world today, it's clear that your ability to juggle clients and manage accounts has the potential to make or break your business.
On that note, here are 5 financially-savvy money tips that entrepreneurs can use to keep cash flow issues at bay while waiting for that next payment to clear.
Tip #1: Take Advantage of Deals
When some people hear advice along the lines of "Go for the deal!" or "Always find the best bargain!", they immediately start thinking of reality TV episodes where coupon addictions and cashback obsessions make for serious must-watch viewing.
However, the truth is that even if you put up your shingle in an industry that expects lavish office arrangements and expensive plating as a matter of course, it's still possible to get what you need while also saving money in the process.
For instance, you can use coupons, buy items in bulk, or make a habit of buying furniture at auction or on clearance.
Even though browsing warehouse catalogs and shopping in thrift stores might not always be fun, the extra money in your business account can go a long way towards allowing you to spend a little less if you took out a personal loan while also leaving you with a bit more cash in your business accounts.
Tip #2: Track Expenses Like It's Your Other Job
. . . Because if it isn't, then it's about to be.
For a number of reasons, small businesses are sometimes prone to what we'll call "expense creep". Which is to say, situations where you have a business lunch here and you bought a few supplies there, but fast forward to the end of the month and you're looking at your corporate credit card statement and thinking, "How the heck did this happen?"
To be clear, unexpected expenses can and do come up. In addition, it's important to be flexible so that you're able to respond to the day-to-day needs of your business. But in many ways, tracking your expenses is the first step towards managing those same expenses in the future.
Tip #3: Don't Be Afraid To Negotiate
While it's true that vendors and suppliers will often have stated rates on their websites and so on, you might be surprised at how much money you can save simply by asking for a discount.
Think about it.
If your business had just landed a whale of a client who would give you guaranteed money for months or years to come, wouldn't a small discount make sense?
As a business owner, you probably spend more time using discounts to deliver value as opposed to being offered them. But there's a reason why discount promotions are so popular:
Tip #4: Plan Your Purchases Ahead of Time as Much as Possible
While sudden expenses can and do come up, the whole "I can't pay this expense because I just paid that expense" approach to managing the company's bank account can impact your business in multiple ways.
It could be as mild as staff having to live without morning coffee because you need new funds before you can replace the coffeemaker.
But sometimes it could be as serious as having to drop your marketing campaign because you can't afford to keep the ads running until the next time you get paid.
If you can stagger your major expenses so they're not disruptive to your day-to-day operations, it becomes a lot easier to take your business to the next level.
Tip #5: Let Spare Money Sit in Your Account
What do business owners and investors have in common financially?
The fact that sometimes it's a good idea to keep cash on hand.
As a business owner, you can't always predict when your products or services are going to be in demand.
But when you make a habit of keeping reserve funds in your bank account, you're never truly stuck in a do-or-die situation with no resources available to you. And in a world where more than half of small businesses don't survive past the 10-year mark, the peace of mind that comes with that financial cushion is valuable to have.
At the end of the day, managing the finances of your business is about knowing how to manage the money you have.
The good news is that if you make a habit of being cautious with your funds, managing money on behalf of your company will quickly become second nature to you.