For any business to succeed, especially during an uncertain economy, it is critical to have cash-on-hand and to know how to maintain a healthy cash flow. However, during the day-to-day operation of any small business, the ongoing maintenance of cash flow has been found to be the most difficult task, and as a result, a large percentage of businesses struggle with their finances year-after-year.
Business Cash Advance.com helps businesses stay ahead.
Here are some tips that have been proven effective to help small businesses retain a steady cash flow.
Obtain a Cash Advance or Factor Future Credit Card Sales
As you are already aware, factoring of accounts receivables or business cash advances are very popular and effective options to assist in the maintenance of a healthy cash flow. However, being able to obtain multiple cash advances is an absolute way to ensure a steady stream of cash for your business needs. Having cash up-front obviously helps any business, but it definitely benefits those of you who may sell goods that require a long period of time before receivables are converted to cash.
Negotiate Terms with Vendors
Try to negotiate terms with your suppliers to get an extended timeframe to pay for your purchases. This will delay cash from being withdrawn from your accounts and less money will be tied-up in your inventory. During the current state of the economy, many vendors have been more lenient with agreeing to extend payment terms for their customers. This helps suppliers maintain their customer base, and more importantly, it allows you spend very little to maintain appropriate inventory.
Require Deposits for Custom-Made and Ordered Goods
If your business sells any custom-made goods, it is wise to ask to be paid up-front for the merchandise, or at least require a deposit before ordering or making the product. This will decrease the risk of not being paid because at least a portion of the payment has already been received. In addition, negotiating for periodic payments to be made between the time the order is placed and delivered can also help you sustain a healthy cash flow.
Open and Monitor a Savings Fund
Typically most small businesses experience seasonal changes in sales volume, or sales are impacted by the economy. To be prepared for the slow times and hard times, it is recommended for you to save a portion of the total amount of your revenue in a savings fund. This will help you continue to operate your business during "off" times.