Ensure Your Company Has Cash Flow for Growth
Cash flow problems are a major obstacle to business growth. Neglecting to solve the issue will make running your company increasingly difficult. If you are unable to contain the situation, your business may eventually have to close. Fortunately, there are some steps you can take to ease your organization’s cash flow difficulties. Following are some of the most effective solutions to solve your company’s cash flow problems:
Raising Your Prices
When you first opened your doors, you may have sold your goods or services for a low price to attract new customers. Once you have been in business for a while, however, you are likely to notice that your low rates can have a damaging effect on your profitability. It may be time to consider increasing your prices slightly. Of course, you should be careful not to raise your rates too much. Doing so can drive away your existing customers and further exacerbate your company’s cash flow issues.
Upselling and Cross-Selling
Upselling and cross-selling can help you increase your wallet share with different clients. Quite often, the result is more funds for your company to use on its various expenses. Before you dive into the world of upselling and cross-selling, it is vital that you provide your sales team with plenty of training on the practice. If left untrained, they may come across as pushy when trying to introduce new products to your customers.
Invoice factoring involves selling your invoices to a third party, known as a factor. You can take advantage of invoice factoring if you have already made sales and are waiting for payment from your customers. Once you have sold your unpaid invoices, it is up to the factoring company to collect payment from your customers. Factoring is an effective way to get your hands on quick working capital to pay bills and expand your operations.
For most companies, it is cheaper to buy equipment and real estate instead of renting. However, buying is only the better option if the business already has plenty of cash for day to day expenses. When you are leasing, you usually make smaller payments, which frees up money for other expenses. As a bonus, lease payments are considered a business expense, which comes in handy during tax season.
The Bottom Line
Cash flow is the lifeblood of your business. It allows you to pay your bills, purchase raw materials, plan for business growth, and generally ensure that your business continues to operate. Implementing any or all of the four ideas outlined above will help ensure your company has enough cash-on-hand for whatever expenses or opportunities may come your way.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days. Call us today for more information at 800.405.6035.