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3 Ways Small Business Owners Can Overcome Their Cash Flow Problems
It is not uncommon for small businesses to run into cash flow issues every now and then. As we detailed in our last blog, there are several signs that your small business may be having a cash flow problem. They include being unable to make timely payments to suppliers, having to borrow money to cover business expenses and finding difficulty in paying your employees. Does this sound familiar? Thankfully, your cash flow problems don’t have to last forever!
Here are three ways small business owners can overcome their cash flow problems:
1. Cut out your non-essential expenses.
Are you simply spending too much? If cash is tight, it’s time to review all of your current expenditures to see where you can cut costs. The act of trimming the fat may include reducing marketing budgets, renegotiating vendor contracts or cutting back on office supplies and utilities. Of course, you don’t want to compromise the quality of your product or service. However, cutting out unnecessary spending will help your business to weather financial storms.
“Look at your company’s past variable expenses and calculate what percentage of sales they represent,” advises the Business Development Bank of Canada (BDC), “Historic percentages provide both a good indicator of potential future costs and a benchmark to use in keeping those costs in line with selling activity.”
2. Negotiate better terms with your suppliers.
In our last blog, we stressed that being unable to make timely payments to your suppliers has consequences. Among them is losing the ability to negotiate better deals. For example, maybe you’d be eligible for a discount if you buy certain items in bulk. Perhaps, you could negotiate extended payment deadlines if you make payments before their due dates. Have an open dialogue with your suppliers to see if they can help ease your financial strain.
“Negotiating the right deal with your suppliers doesn’t necessarily mean getting what you want at the cheapest possible price,” notes Info Entrepreneurs, “You may want to negotiate other factors such as delivery times, payment terms or the quality of the goods. Most business owners would view a good deal as one that meets all their requirements. But there are many other factors to consider, such as whether you want to do business with a particular supplier again.”
3. Explore alternative funding options.
Many small business owners visit their local banks to look into securing business loans. They figure the funding will help with their cash flow problems. However, for many entrepreneurs, getting approved for loans is difficult. This is where Synergy Merchants’ unique merchant cash advance program can truly come in handy. It’s not a loan. It’s an advance on future credit card and debit card sales.
As a result, approval is super easy! As well, funding can be received in as little as 24 hours. Also, the advance can be put towards whatever you like. Therefore, if you have cash flow problems, the same merchant cash advance can pay your employees and suppliers, help you to order new inventory and settle your debts with your creditors.
Allow Synergy Merchants to help you out of your cash flow problems. Please don’t hesitate to call us at 1-877-718-2026 or email us at info@synergymerchants.com. You can also apply online for a free, no obligation quote!