A business cannot grow without a
cash flow. You cannot really pay your bills if you do not
have enough cash in the bank. These expenses include:
● Energy bills.
● Employee salaries etc.
Being late on these bills can
cause havoc. For example, you run the risk of getting kicked out
of your premises if you do not pay the rent on time. Similarly,
you can lose electricity if your energy bills are not paid on
This can put a business in
hot water. In fact, poor cash flow is the #1 cause
behind businesses shutting down. This is why businesses
need to look for ways to increase cash flow.
While a business should
try to reduce expenses and increase revenue, i.e: the
amount of cash saved, this is easier said than done.
It is not very easy to
increase revenue, but with proper care, you can
definitely improve your businessís cash flow.
Without much ado, letís have a
look at five ways to increase cash flow of your business:
Incentive And Late Payment Program
You must be well aware of your invoice
system and ensure that all invoices are cleared on time. Late
invoices can disrupt your financial system and cause poor cash flow.
One way to reduce this customer
behavior is to offer small incentives to customers who pay on time.
Discounts can be offered to customers
who pay on or before time so that more and more customers pay you
quickly. This way you will always have a good amount of cash in hand
to pay your expenses.
In addition to this, you can levy a
surcharge on customers who pay you late to prevent them from making
late payments. However, make sure to draw such a plan with care as
it may upset some of your
Take Business Loans
There are many business owners who
tend to shy away from
getting a business loan to fulfill their business needs for one
reason or the other. This is nothing but a big mistake as loans can
help a business come out of financial trouble.
There are many kinds of loans out
there, most importantly secured and unsecured loans. Secured loans
are risky as you need collateral to get such loans approved. On the
other hand, there are unsecured loans just like
www.unsecuredbusinessloans.com.au that require no collateral and
are typically given away instantly.
Business loans can vary from $1,000 to
$500,000. The amount of loan sanctioned depends on several factors
including the type of loan you apply for and the amount of money you
Loans are for a specific period of
time and you have to pay interest that is charged monthly, quarterly
or yearly, based on your terms. Make sure to read the terms
carefully so that there are no issues later on.
Moreover, look for a loan that is easy
to pay so that you do not have any trouble in the future. Also, keep
the interest rate as low as possible as it can be a trouble to pay
the interest. Lastly, remember that loans are not a permanent
solution and you should look for other ways to meet your financial
Every action has an equal and opposite
reaction. In case of cutting costs, the reaction is an increased
cash flow. When a business
succeeds at cutting expenses, they are actually saving money
which can be put to better use.
Look out for
that can be cut off. If you have extra space, move to a smaller
office or rent out the section that you do not need. Get rid of
employees that you do not require and shift to equipment that save
These are some ways that will help you
increase the cash flow of your business and run it without any