Creating A Better Cash Flow Situation To Better Your Business

“Cash flow” is most easily defined as the movement of money in and out of a company. At the end of the day, it’s obviously imperative that you make more money than you spend. Therefore, “cash flow” can also be defined as the lifeblood of any business. It is the fuel that keeps your operations running smoothly. However, maintaining healthy cash flow can be a challenge in today’s ever-changing business landscape.

What steps should your business take to create a better cash flow situation?

Offer subscription-based services.

Implementing a subscription model in your business can provide a steady stream of income and reduce the uncertainty of one-time sales. For instance, if you run a bakery, offer a monthly dessert subscription box filled with delightful surprises. This way, you ensure a consistent revenue stream while delighting your loyal customers.

“Since a subscription business offers products and services on a recurring basis, they benefit from a steady stream of revenue,” informs BillingPlatform, “This concept is commonly referred to as compounding cash flow. Compounding cash flow refers to the incremental recurring revenue received from subscribers.”

Create strategic partnerships.

You know the old saying, “Two heads are better than one.” Get some help from a complementary business to generate advertising campaigns that will benefit you both. For example, if you own a fitness studio, you can team up with a nearby health food store for joint promotions. These partnerships can attract new customers and increase sales while keeping marketing costs down.

“Creating strategic partnerships is a highly effective sales growth approach that can lead to increased revenue,” says Kiflo, “It all comes down to choosing a partner that provides a complimentary service or product. Finding the appropriate companion is the most challenging task. Hiring a third party to negotiate the agreement on your behalf is the best method to form a strategic alliance.”

Manage your inventory efficiently.

Identify slow-moving items and consider bundling them with popular products at a discount. This can help you clear out old stock while generating revenue from your bestsellers. As well, explore just-in-time inventory management to reduce carrying costs. By staying agile, you can free up cash that would otherwise be tied up in excess inventory.

“The more cash you have tied up in inventory, the less you have on hand to spend, but you need to maintain enough inventory, or else you’ll run out and won’t be able to make sales,” writes Nick Zaryzcki of Bench, “If you’re experiencing a short-term cash flow problem, consider running a sale. Sales can be used to inject cash into your business now and get rid of a surplus of product, solving two problems at once.”

Encourage customer prepayments.

Offer your customers discounts or special deals to incentivize early payments. For instance, if you operate a salon, you can provide discounted haircut packages for clients who prepay for multiple appointments. This not only improves your cash flow but also strengthens customer loyalty.

“Receiving prepayments can give you better cash flow and more accurate forecasting, and offers cost-saving and convenience for your customers,” notes Checkout.com, “While making prepayments helps you more accurately allocate resources – and enjoy your own time and cost-savings.”

Apply for a merchant cash advance.

For many years, Synergy Merchants’ unique merchant cash advance program has been helping small and medium-sized Canadian business owners to maintain better cash flows. For information about how our program can help you, 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!