How to increase cash flow in 30 days or less

[Listen to the Podcast version here]

Today we’re talking about everyone’s favorite topic: cash flow!

Cash flow is the life blood that keeps our businesses running.

It’s also one of the hardest things for many business owners to keep on track.

I want to share some quick things you can do to increase your cash flow.

But before I do, I want to talk a little bit about why managing cash flow can be so difficult.

Cash flow isn’t just a startup problem.

It isn’t just a small business problem.

Huge corporations and non-profits have cash flow problems too.

So why is this so hard to get right?

One reason is that there are a lot of moving pieces to keep track of.

You need to make the sales.

Then you need to make sure you collect the money.

If you carry inventory, you have money tied up, just sitting there until you sell the products.

Your employees have to be paid, even if you haven’t yet.

Your vendors don’t care about your cash flow, they want payment to protect theirs and keep selling to you.

Operating expenses keep piling up even if sales are low. There’s only so much you can do there.

If you borrow money to cover operational expenses or to invest in assets to grow the business, you have to make the debt payments in addition to your normal expenses.

And, of course, somewhere in there as the owner, you need to pay yourself too!

It’s a lot to manage!

Another reason is that many businesses don’t have reliable systems and processes in place to keep track of the various cash flow pieces.

Your sales process might be solid, but collections are poor.

You might deliver products on time, but you’re carrying too much inventory, or even worse, stuck with inventory your customers don’t want to buy because the market has shifted.

Expenses are spiraling out of control because approval processes aren’t in place or maybe there’s no budget to refer to.

Unfortunately, these are not cash flow problems that can be solved overnight.

So, what can you do right now to improve your cash flow?

No. 1: Review your customers’ purchase history to see if you’re missing out on sales.

Many businesses have customers that buy in patterns. Do you?

Do you have customers that normally buy from you on a monthly or quarterly basis but haven’t bought from you recently?

Reach out and see if they are ready to place another order.

No. 2: Can you sell something else to your current customers?

Do you have complimentary products or services that you could offer to your current customers?

Talk to them individually or send an e-mail blast depending on how you normally communicate with them.

This is a great way to increase your cash flow.

One caveat here on increasing your sales:

Watch out for negative cash flow from your cost of sales.

What do I mean by this?

If you are a service-based business, the majority of your cost to increasing sales is probably labor related.

If you are a product-based business, the majority of your cost to increasing sales is probably inventory related.

Negative cash flow happens when you have to pay for the additional cost of sales before your customer pays you.

What this means is you could end up in a worse cash flow position than you started with if you’re not watching the timing of these costs.

If you have labor capacity available or inventory in stock to cover the cost of the additional sales, then you aren’t expending much extra cash to get the sales.

If you need to hire additional labor or purchase additional inventory for sale, then you could be putting yourself into a negative cash flow position.

No. 3: Clean up your accounts receivable.

If you extend credit to your customers, late payments could be contributing to your poor cash flow.

Review your accounts receivable report for any customers who have past due balances and reach out to them to arrange payment.

Consider offering a small payment discount to your customers with current balances to pay early. 1-3% is a good range depending on your industry. You’ll build some goodwill by offering a discount and get cash in the door faster.

No. 4: Make it a priority to make it easy for your customers to pay you.

• If your business accepts credit cards, include a payment link on their invoice so it’s quick and easy for them to click through and pay.
• If you don’t accept credit cards, should you? What about cash payment apps like Zelle or PayPal? These aren’t right for every business, but if it makes sense, it’s one more way to get paid faster.
• If you have high ticket invoices where your customers would mail you a check or send a wire transfer, talk to your bank about accepting ACH payments. Wire payments are expensive, so a lot of customers don’t want to use them. It’s a lot cheaper for your customer to send an ACH payment than a wire, so it could be a good incentive for them to pay you this way instead of opting for a slower check payment.

No. 5 – Negotiate better payment terms with your vendors.

If you have vendors that offer payment terms, it doesn’t hurt to ask for better ones.

You might start off having to pay up front because you don’t have any business credit. But if you’ve been with that vendor for a while, they might be open to offering payment terms now.

Or if you have short payment terms like Net 7, if you have a good payment history, they might be open to giving you longer payment terms.

Or, you could have payment terms, but your credit limit is low. If having more credit with that vendor would help your cash flow and you have a good payment history, ask for a credit line increase.

No. 6 – Review your expenses for things you no longer need or could get cheaper.

Remember that software you tried for free last April? The one that required your credit card for the free trial, and you just forgot to cancel it?

Or the digital subscription you haven’t looked at in months but are still paying for?

When was the last time you shopped around for insurance or utilities?

It’s a good habit to review your expenses for cost savings on a regular basis. Things slip through the cracks and can cost thousands of dollars in the long run.

While you’re increasing your cash flow in the short term, you can start thinking about long term changes you can make so that those big cash flow problems we talked about earlier don’t become a problem for you!

You can use all 6 of these strategies on your own in the next 30 days. If you’d like to get even more accomplished, keep listening!

Today, I’m sharing my new 30-Day Cash Flow Catalyst Group Intensive.

If you're ready to:

 + increase your profits

+ increase your cash flow

+ reduce the number of hours you’re working

+ or finally take that dream vacation

Then this program is for you.

Here’s how it works:

30 Days of Cash Flow Analysis & Strategy

You'll identify what's blocking your cash flow by diving into the numbers and analyzing your current cash flow management system.

4 Weekly Group Calls

As you're diving into your cash flow, we can explore the causes and potential solutions together to get some quick wins while you build your plan for the future.

Voxer Access To Chat In Between Meetings

No need to have to wait an entire week to ask a question. Ask me questions any time and I'll get back to you during business hours so you can move forward fast.

My 30-Day Cash Flow Catalyst Group Intensive starts on December 4^th.

I’m keeping the group small – only 10 spots are available.

If you’re ready to tame the cash flow monster in your business so you can spend more time enjoying life, click here secure your spot.

If you’re not sure if this intensive is for you, but you’re interested in learning how we can work together to increase your cash flow, click here to schedule your Cash Flow Strategy call.