Money Saving Tips For Your Business
Synergy News • Jan 25, 2017
Managing your cash flow is essential for your business to stay on top. Having a healthy cash flow at hand will help your business conquer any challenges it may face such as: late payment from customers and unexpected business expenses etc. Here are some tips to better manage your cash and help grow your business.
Plan for cash flow matters
Regardless of how much money your business is generating, it’s imperative to have a plan in place for cash flow issues. Therefore, if you encounter any cash flow problems, you will be able to follow a process and know exactly which business costs to reduce or remove.
Keep a reserve of cash
Have money in place for a “rainy day.” When business is good put to the side some money. When you land a big or important contract or there is a seasonal element to your business, setting aside an extra bit of money and getting a surplus interest on it, can help your business for those slow periods and when money is tight.
Be on the lookout for cash savings
Continuously be on the lookout for ways to save money. This can include: finding savings in employee benefit plans and reducing money spend on outside consultants. A great way to save money is on phone and internet bills, switching account packages to gain more call minutes and data can contribute to cost savings.
Get a line of credit before you need it
As reassurance, if cash starts to get low, the money is readily available.
Get paid sooner
One of the best ways to get money quicker, is offer customer incentives for early payment by offering a small discount before payment due date. For some businesses, accepting credit and debit cards instead of cash from customers and suppliers can speed up payment. Businesses such as: Netflix, gyms, and magazines etc. that require monthly memberships or subscriptions, use preauthorised debit and deduct money from the customer’s account at the beginning of each month. This makes it easier to plan business money for the rest of the month. If a customer’s payment is overdue, don’t fill their next order until they pay. Its recommended to ask for part of the payment upfront.
Source ways to pay others later
Most startups find paying monthly bills challenging. Ask suppliers for flexibility on payment terms. If a payment is due in 30 days find out if it can be paid in 45 or 60 days instead. This will enable you to accumulate an extra month’s cash. Note this is not a strategy to be used long term it should only be used to help with short term cash flow.
Focus more on customer retention
Commonly, businesses spend most of their time and energy on sourcing new customers to buy their products and services than making their existing customers happy. Focus not only on growth, but on retention. Loyal customers often increase the amount they’re buying when they’re happy. Boosting your customer service can generate returning loyal customers, which will help your business when it is slow.
Increase prices to get more customers, this may help improve your business. Customers may complain at first, but if they like your product or service they will return. Prove how valuable your service is to the customer and they will pay for it.
Look for better bank interest rates and fees
There are many banking options available, find out which banks offer the best rates and service. Learn more about any banking fees you’re paying and see if you can reduce costs or remove them completely.
Get free money.
There are many government funding options available for small businesses, including grants and matching funds. Businesses should also consider bartering their products and services with other companies to not only reduce costs, but also build brand awareness. A business could sponsor an event, instead of paying full price for sponsorship, they can donate a certain number of products. That way you will get brand awareness to target audiences.