Managing Your Small Business Cashflow
One of the most common causes of business failure is inadequate financing. When you own your own business it is up to you to make sure that the finances are in order, and that you have enough cash to pay for any expenses that may come up. So what is cash flow and why is it so important? Simply put, cash flow is the lifeblood of your business and comes from sources like customer payments, investors, or interest on savings or investments.
Having a positive cash flow within your business is essential if you want to purchase inventory, expand or simply to pay your employees. Positive cash flow is also an indicator of financial health, making your business look more
appealing to investors and financial institutions.
Cash is King
This is an expression that is thrown around a lot in business and it’s an expression filled with truth. Cash is needed for:
Keeping up with debt
Sometimes it is necessary to borrow money, but having no monthly repayments will free up your cash flow.
This can only be achieved if you have a positive cash flow to invest in your business.
Having a strong cash flow allows you to be more flexible when dealing with unexpected situations.
Staying in the Green
What can you do to keep your business green? Well thankfully there are many ways to achieve this:
Lease, don’t Buy
We all know that leasing supplies/equipment/real estate usually ends up being more expensive than buying, but by leasing you pay in small increments which will help to improve cash flow. GRID Finance have a new leasing product that could be the right option for you.
Make sure that you know what stock you have, and that it’s not lying around gathering dust. Perform inventory checks regularly. Don’t buy items that don’t sell. If you’ve had items for too long, sell them off at a discounted price.
Sometimes you just need a loan to help you get through a financially difficult time. Make sure that you investigate all of your loan options because there are now more options than ever. Whereas before banks were your only option, now other companies are offering financial solutions to small businesses. These companies, like GRID Finance, are on the rise and are definitely worth looking into. If you can, consult a financial advisor or accountant to go over the best options for you and your business.