How to Improve Cash Flow in your Business

Not everyone starts a business just for the financial gain. Many choose to become self-employed for lifestyle reasons or to indulge in a lifelong passion. However, a business needs...

Not everyone starts a business just for the financial gain. Many choose to become self-employed for lifestyle reasons or to indulge in a lifelong passion. However, a business needs to make money. Without a decent amount of money coming through the company, there’s every chance it’ll fail pretty quickly.

Improving cash flow is the aim of many a struggling business, especially in the current economic climate. By doing so, a business can stand firmly and may even open opportunities to grow.

Reducing fixed costs

Fixed costs include every outgoing crucial to support the business at its current level of operation. Reducing these costs can be difficult but it will undoubtedly pay off. Look at ways to reduce the amount of rent you’re paying, for example. You can then start to look at lowering any building expenses and the money spent on staff; basically any expenses which remain the same each month. If done properly, cash should be released for other areas of the business.

Products and supplies

Keep track of your inventory and avoid stockpiling too much, as you may struggle to sell all of it. It’s possible to avoid overstocking by simply selling the products you have before ordering more. This must be done carefully, however, as it’s important that you’re able to keep customers happy – once you lose their trust, it’ll be extremely difficult to regain. Ensure you’re able to strike a balance, perhaps buy changing your stock-buying habits gradually.

Another reason to keep on top of your inventory is that buying habits will change. A product may be popular at one stage but consumers are likely to move onto something else pretty promptly. Also, as these habits change, keep on top of your pricing – ensure the prices you charge fit in with the rest of the industry. Most customers will expect minor price increases every so often, so make the most of this within reason.

When it comes to sourcing supplies, you may find it easier to get everything from one place; you may even be a loyal customer of one particular supplier. However, if this is the case, you’re unlikely to be getting the best deal. Scout out the different options you have and compare prices regularly. It’s even worth speaking to those around you in the industry for recommendations. As with the products you sell, it’s only worth buying in bulk if you’re sure everything will get used in a reasonable time period.


It may seem a little obvious, but the more you sell, the more profit you’ll make and the better off your business will be. Some business owners wonder why they’re not doing so well financially without realizing that many consumers aren’t even aware the company exists.

Technology has opened up a whole new world of opportunities for promotion, and many are extremely cheap or even completely free. Maintaining a Twitter presence, for example, requires minimal time and effort but with the right strategy, it can work wonders to raise the profile of any given business.

Social media sites are basically huge networks of people – meaning word of mouth promotion can spread even further within an extremely short time period. Also with Twitter, and sites like Pinterest and Facebook, business owners are able to keep consumers interested in the products and services they offer. Not every post has to be sales driven either – most should just be published with the intention of maintaining and improving the relationship your business has with its target audience.

The idea of improving your company’s cash flow may seem daunting, but the process is often simpler than you might expect. Providing the right strategies are chosen and executed well, there’s no reason why you can’t improve the fortunes of your business in a quick and efficient manner.

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