Tough times come and go. Of course, you want your business to be permanent and strong. To muscle through uncertainty and economic downturns, your business will need to adopt and maintain solid money management.
If you find handling cash flow difficult and time-consuming, you’re not alone. In fact, nearly half (42%) of small business owners admit managing cash flow is a big challenge. But maintaining working capital is a must if you want your business to succeed, rain, or shine. The following tips will help you learn how to manage your small business’ money effectively and develop good financial habits:
- Time Your Purchases
One of the best ways to avoid instances of low cash flow is to time your purchases, avoiding unnecessary purchases until you’re sure all bills have been paid. Need new equipment? Thinking of taking on a new monthly expense? Before adding more items to your budget, make sure you have enough cash on hand to cover those new expenses.
- Maintain a Cash Reserve
As so many businesses have found out the hard way in 2020, having a cash reserve is essential. Keeping a small business cash reserve is the key to managing money wisely and effectively when you find yourself in a tough spot. Whether you slowly set aside the cash on your own or seek outside funds, make sure you build up a significant cash cushion for emergencies and other unexpected situations.
- Obtain Additional Funds
It never hurts to know what your options are for obtaining additional funding. Even with a good cash reserve, you can still find yourself in need of extra capital. Find out what the best option is for your business’ short- and long-term needs. In most cases, you will need money fast. An option like a merchant cash advance supplies money in as little as 24 hours, and involves a quick application process for small business owners.
- Cut Costs and Increase Revenue
While it might sound pretty straightforward, cutting costs and increasing revenue can be more difficult than it sounds to accomplish. Do you know how to go about controlling your business’ expenses? The first place to start is analyzing your expenses. Identify areas you can scale back and any frills you can eliminate. Then find ways to increase revenue like offering discounts, promoting products or adding new products to sell.
- Stay on Top of Receivables
If you offer your customers credit of any kind, you already know how much cash can get tied up in outstanding accounts receivable. All too soon, you have money sitting in unpaid invoices and your business is short on cash to operate smoothly. Diligently track receivables, pursue payment, and try offering early payment discounts.
If your business is currently struggling with day-to-day costs, consider the advantages of a merchant cash advance. Get money in your account in less than 24 hours, so you can pay your employees and bills on time and operate smoothly. When it comes to strong money management, the secret is simply taking that first step.
With FAM’s merchant cash advance, we get paid when you get paid. Our payment is a percentage of your daily sales. When you have a slow month, you pay backless. When you have a good month, you pay back more. Secure a flexible structure that ensures you can afford payments. No tax returns or financials are required when you apply, and you receive funds within 72 hours from submitting your application.