We’re often told that ‘Cash is King’. But what does it mean?
Quite simply, cash flow refers to the money coming in and going out of a business.
A business’ income needs to be substantial enough to withstand the necessary outgoings, but with property costs, wages, vital materials, expenses and bills to consider (the list goes on!), managing cash flow can understandably seem like a daunting task.
The key is to minimise outgoings and maximise your revenue streams where possible, and we’ve compiled some useful tips below to help you do just that.
1. Be prepared
This sounds obvious, but unexpected expenses can and do crop up from time to time. Your corporation tax, for example, can have a severe impact on cash flow, or tip the balance if not budgeted for properly. Be as proactive as possible and plan ahead to identify any potential weak periods, and combat them in plenty of time. Johnson Reed’s loan facilities can be organised over a minimum term of three months from just £2000 to provide the ideal solution for last-minute tax bills.
2. Sell, sell, sell!
Consider where your time is best spent and how you achieve sales conversions. Don’t be afraid to revert back to face-to-face meetings or phone calls to get your business and product in front of prospects. A personal approach is less forgettable and can really set you apart from your competitors.
3. Spread the cost where possible
When upgrading or purchasing new equipment for the business, consider a lease. Ease the strain on your working capital by spreading the cost over regular, more manageable chunks and budget confidently around a fixed payment plan. This is especially the case when new kit has a positive impact on new sales or overheads; make the kit pay for itself!
4. Nurture your credit score
Keep on top of your rating by filing all returns and accounts of time and paying invoices on time. A good credit score is important in all aspects of your business, not least when it comes to applying for finance. We work with businesses in all shapes and sizes, but the better the company looks ‘on paper’, the more accessible best rates and low-cost funding will be, and the less stringent any associated conditions. See Experian’s infographic below for more useful tips to help keep your credit score squeaky clean.
5. Be everywhere
Marketing doesn’t need to cost a bomb, especially with all the online tools we now have at our disposal. One of the best ways to engage customers and prospects is to create fresh and engaging content regularly. Not only will this boost your position in organic search rankings, but it can also help establish you as a favourable voice of authority in your industry. Social media profiles are entirely free and provide you with yet another medium to show just how great your business is. Many also now have sophisticated advertising tools, helping you target prospects according to age, demographics and interests from just a couple of pounds!
Experian offer some great cash flow management advice. Take a look at the infographic below or visit their website for more information.
