7 Ways to Help Grow Your Business Without Cash Flows Concerns

You’ve poured blood, sweat and tears into your business and it is finally paying off. But, passing on that big sale or superstar hire because your business doesn’t have the cash to see it through could be a big setback. You can manage your business’s growth without the pain of capital and cash-flow concerns. Doing so requires a strategic approach that includes both pursuing opportunities and avoiding pitfalls.

  1. Analyze objectively

Opportunities come in all shapes and sizes and some are better than others. When considering investing in infrastructure, new hire, or other investment, think big picture such as the impact it will have on your brand, earnings trajectory, and organizational structure, etc. Focusing on short term profit alone may not be good for your organization’s long term health.

2. Be in the know

Rather than being surprised by upcoming cash flows needs, such as making payroll or a major vendor’s invoice coming due, get ahead of the game by having a cash flows projection. A cash flows projection is the crystal ball into a company’s future cash flows needs. A cash flows projection will allow you to see gaps before they actually happen so that you can line up your funding sources to bridge those gaps. On the flip side, it also allows you to strategically pursue opportunities.

3. Take control of cash flow

As your company grows, install systems and processes to ensure you’re managing your cash flow well. Instead of sending out invoices at the end of each month, send them out as soon as you completed the jobs. You may also consider offering a discount for fast payments, or allowing your customers to finance the invoice. These options allow your company to get paid upfront while giving customers the option to make payments over time.

4. Evaluate your borrowing options

When your business is growing, you may need new credit opportunities to provide you additional capital. Make sure you understand the return on investment (ROI) each dollar will bring to your business. Small business lending should always be a revenue-generating activity and never a take-it-because-it’s-there decision. Take only exactly what you need and when you need it and so that you have time to assess the ROI to your business.

5. Diversify your funding sources

Capital is the fuel to businesses of all sizes, whether just starting out or growing quickly. Businesses benefit from peace the mind when they have access to capital when needed. Not all business expenses can be paid the same way. For example, you can’t issue payroll on your business credit card. So, multiple funding sources allow you have the option to select the right source for each expense. Consider all of your options and use them at your disposal to create a capital and cash flow safety net. You can make a lot of mistakes and see your way through them if you have the cash.

6. Talent on demand

With a tight labor market, it becomes more costly to hire and keep good talents. Your best solution may be to bring on just-in-time workers. These are individuals with specific skill sets you bring on only when you need them to perform specific tasks. It’s the beauty of the currently thriving gig economy. “Flex talent” helps you control labor costs before you’re ready to bring on another full-time employee.

7. Partner up with your competitors

Keeping inventory in stock is a catch 22. You need inventory to sell to generate revenue, but you need revenue to pay for products or raw materials to sell. Building relationships with competitors can help. Consider buying from other companies that sell the same stock. If you can negotiate a discount for a longer-term relationship, the companies can essentially split the profit margin.

Looking for more advice on improving your business’s cash flows? Contact us for a complimentary consultation.

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