Updated: Dec 12, 2022
Many Coaches and consultants have one question. How to increase cash flow? (In simplest terms how can my business make more money?). In this article we are going to discuss 5 ways to increase cash flow.
1. Record Keeping
To improve your businesses cash flow, you need to start with accounting. How can you improve cash flow if you’re not keeping up with bookkeeping? You may be thinking I will get to it tomorrow, then tomorrow you say next week, next week you say next month. Before you know it, it’s tax time or worse your business is out of money.
Good record keeping is the foundation of a great business. If the foundation of your house isn’t solid the entire structure falls to the ground. Well, running a business is the same. Of course, we all strive to be profitable, why else are we in business. Yeah, yeah, yeah, we want to help people too. Without profitability we can’t sustain helping anyone in our business.
There are many tools available to assist you with keeping accurate books. You can use the older fashion excel sheet. Marking every payment and sale that is going in and out of your business. Saving receipts, and invoices in a folder and referring to them to analyze your business growth. Well, let me tell you something. There is a much easier and efficient way of doing the same thing. We use a cloud-based software called QuickBooks. After setup, you connect your bank accounts, and each day the transactions automatically download. At which point you then organize all your income and expenses in virtual folders for easier management.
Now that we've shared an easier way of record keeping, you’re going to jump on it today, right? Maybe not, on to the next.
Establishing a budget for your business. If you haven’t done this step, you may have a little work to do. You can begin by cutting costs. Look at everything you purchase for your business or spend money on. Take rent for example, you may be paying too much on a rental space so negotiating with the landlord for a lower rate may be beneficial. Giving up the rental space and going virtual can reduce your overhead tremendously. Especially if you’re operating in the larger and more expensive cities like New York, and California.
Are you even using all the subscriptions you’re paying for? You would be surprised to see how much you can save by eliminating unnecessary subscriptions. Are you paying for quarterly or annual dues to organizations? Are you even benefiting from keeping them? If not, maybe you should cut it.
Switching over to automatic payment systems can be good. NO Cash App, and Venmo. You’re a real business, right? You want to be taken seriously by customers, right? You run a professional service. You can set up invoices to automatically bill customers monthly, or how ever frequent. Stripe I know has this feature. You can have your clients billed every 30 days or less. Even offer incentives for early payments, this can increase your cash flow and client retention.
There are other budgeting options that can really take your business to the next level; however, we’re starting with the basics in this article. For more advanced options, contact us.
Check your pricing structure. When was the last time you increased your prices? Of course, we’re not suggesting take one of your service prices from $500 to $2000 just because this article says. Do your research first, check your competitors and the value you’re giving before the price jump.
Many of you have the same pricing you started with 3 years ago. After 3 years I am certain you have increased the value, you’re bringing to your client relationship. You spend countless hours a year in continuing education, reading books, articles, and investing in having your own coach to improve your skills. These alone warrants a price reevaluation.
4. Consolidate debt
Consolidate and renegotiate any debts your business has. You may be able to extend payment terms with your lenders or receive a lower interest rate. Since the Covid pandemic many lenders have special programs, you can take advantage of.
It may be beneficial to outsource certain business operations. Evaluate the needs of your business and determine what works best for you. It can be costly to hire employees, even though the tax write offs are enticing. It may be a wiser and more strategic move to outsource payroll, accounting, marketing, human resource etc. Guess what? These are also tax write offs.
By implementing these strategies, you will quickly gain the upper hand on the finances of your company allowing for a better cash flow. Pretty soon you’ll be reaping the fruits of your labor. If you want your cash flow to continue to improve you must keep an eye on how your cash is moving in and out of your business.
Key Point: If you want your business to sustain profitability and continue to grow, you must take bookkeeping seriously. You may decide to do it yourself or pay someone to do it. Either way, make sure it is a top priority, your cash flow will thank you for it.
To book an appointment, click here:
To begin self onboarding, Click here: