7 Strategies For Keeping Cash Flow Positive During Tough Economic Times
7 Strategies For Keeping Cash Flow Positive During Tough Economic Times
For small businesses, cash flow is always a critical element. During tough economic times, cash flow will be the difference between success and failure. Here are seven proven strategies to keep cash flowing:
By: Caroline Jordan
For small businesses, cash flow is always a critical element. During tough economic times, cash flow will be the difference between success and failure. Here are seven proven strategies to keep cash flowing:
By: Caroline Jordan
1. Rein in those receivables. Cash flow is tight for most businesses right now. Allowing customers to use your business as a bank is a surefire road to cash flow difficulties. Start calling your customer as soon as an invoice gets overdue. The longer you wait, the less likely you'll get paid. Be the world's squeakiest wheel.
2. Plug up the leaks that drain cash from your business. Remember frugality? We practiced it at home growing up. Turn off lights, turn the heat back, cancel subscriptions for publications no one reads, shop for insurance, shop for phone service. There is no better time than now to get a better deal.
3. Defer expenses or buy like crazy? How and where you spend your precious cash is a huge decision. Do you really need to purchase items now? On the other hand, with all the great deals available, maybe this is the time to buy. The decision to buy or not to buy should be made carefully. Sure, you can get some great deals but every dollar you spend is a dollar you don't have. Choose wisely.
4. Look for evergreen opportunities. Sales of luxury goods are down but psychics and astrologers are seeing record sales. Even during economic downturns, there are businesses that find opportunities and thrive. One of the great things about small businesses is we're nimble, we're agile, we can turn our businesses on a dime. Look for the silver linings that hold promise during a tough economy.
5. Stay on top of your cash flow forecast. You do have one, right? Keep it updated. When are you expecting cash and when do you need cash to pay your obligations? Timing is critical and you'll have a tough time managing cash flow without a forecast.
6. Take a look at your budget. Now is the time to take a good hard look at your budget to make adjustments. Do you need to lower your sales expectations? Do you need to see where you can cut expenses?
7. Increase your marketing activities. This is not the time to stop marketing. This is the time to market like crazy. And no, marketing doesn't have to be expensive. This is make or break time for small businesses. Those business owners who understand and apply good marketing tactics have the advantage.
2. Plug up the leaks that drain cash from your business. Remember frugality? We practiced it at home growing up. Turn off lights, turn the heat back, cancel subscriptions for publications no one reads, shop for insurance, shop for phone service. There is no better time than now to get a better deal.
3. Defer expenses or buy like crazy? How and where you spend your precious cash is a huge decision. Do you really need to purchase items now? On the other hand, with all the great deals available, maybe this is the time to buy. The decision to buy or not to buy should be made carefully. Sure, you can get some great deals but every dollar you spend is a dollar you don't have. Choose wisely.
4. Look for evergreen opportunities. Sales of luxury goods are down but psychics and astrologers are seeing record sales. Even during economic downturns, there are businesses that find opportunities and thrive. One of the great things about small businesses is we're nimble, we're agile, we can turn our businesses on a dime. Look for the silver linings that hold promise during a tough economy.
5. Stay on top of your cash flow forecast. You do have one, right? Keep it updated. When are you expecting cash and when do you need cash to pay your obligations? Timing is critical and you'll have a tough time managing cash flow without a forecast.
6. Take a look at your budget. Now is the time to take a good hard look at your budget to make adjustments. Do you need to lower your sales expectations? Do you need to see where you can cut expenses?
7. Increase your marketing activities. This is not the time to stop marketing. This is the time to market like crazy. And no, marketing doesn't have to be expensive. This is make or break time for small businesses. Those business owners who understand and apply good marketing tactics have the advantage.
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Caroline Jordan, MBA, is a veteran small business owner, accountant, consultant, trainer, and author. She is the owner of The Jordan Result, a company specializing in developing real world, practical resources to help small business owners improve cash flow and business operations. She is the author of Stop the Cash Flow Roller Coaster, I Want to Get Off! and Strength in Numbers. For more tips and articles to help your business succeed visit www.CashFlowRollerCoaster.com.
