{"id":15987,"date":"2017-09-08T16:50:39","date_gmt":"2017-09-08T16:50:39","guid":{"rendered":"https:\/\/qsdemo.wpenginepowered.com\/?p=15987"},"modified":"2017-09-08T17:26:41","modified_gmt":"2017-09-08T17:26:41","slug":"cash-is-king-cash-flow-tips-to-help-your-customers-thrive","status":"publish","type":"post","link":"https:\/\/demos.quickspark.com\/restaurant\/cash-is-king-cash-flow-tips-to-help-your-customers-thrive\/","title":{"rendered":"Cash is King! Cash Flow Tips to Help Your Customers Thrive!"},"content":{"rendered":"

You hear it all the time from business owners… they are constantly worrying about how to\u00a0improve\u00a0cash\u00a0flow<\/strong><\/a> for\u00a0their business.\u00a0 If they’ve\u00a0been in business for two or three years, it\u2019s likely they already know there are times they are\u00a0more secure financially, and times they don\u2019t feel so secure about the stability and future of their business.\u00a0 If they’re new to the business world, they want to know all they\u00a0can about\u00a0cash\u00a0flow\u00a0and how they\u00a0can manage it early on.\u00a0\u00a0Cash\u00a0is \u201cKing\u201d<\/strong>\u00a0as the old saying goes, and it\u2019s true.\u00a0 Below you will find a\u00a0straightforward, easy-to-understand guide that you can share with your customers to help ensure their business isn\u2019t one of the thousands that go under every year.<\/p>\n

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HOW TO IMPROVE\u00a0CASH\u00a0FLOW\u00a0IN BUSINESS<\/strong><\/h3>\n

From what you owe for goods or services (accounts payable) to what is owed to you for goods or services provided (accounts receivable),\u00a0there are many variables that can affect your\u00a0cash\u00a0flow<\/strong>\u00a0including inventory, fixed costs, employee compensation, even how you buy your inventory or when you do your invoicing.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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  1. First,\u00a0let\u2019s talk about your billing or receivables.<\/strong>\u00a0\u00a0How often do you invoice, and what methods of payment do you accept?\u00a0 For business owners, accepting payment via\u00a0cash, check, credit\/debit card, or EFT\u2019s\/ACH\u2019s,\u00a0offering a wide array of payment options<\/strong>\u00a0is essential.\u00a0 The more options you offer, the more business you will attract.\u00a0 Regardless of the method, it all ends up in your bank account as\u00a0cash! Lots of businesses prefer to invoice once per week, for example on Friday afternoons. Consider this for a moment; if you have customers who pay only once every 30 days (or even every two weeks for that matter), you\u2019re missing out on\u00a0cash\u00a0you could have had in your account days earlier by invoicing immediately.\u00a0 Hard to break old habits or a routine, we know; but it\u2019s\u00a0important to having money\u00a0flowing<\/strong>\u00a0continuously into your bank account.\u00a0 If possible,\u00a0invoice the same day\u00a0<\/strong>and clearly\u00a0state your terms on the invoice<\/strong>, or offer an\u00a0incentive to pay quickly<\/strong>\u00a0(10% off in paid within 7 or 10 days, etc.). When customer invoices are past due, give them a call.\u00a0 Don\u2019t feel guilty, and don\u2019t put it off \u2013 your business depends on it.\u00a0 How to improve\u00a0cash\u00a0flow\u00a0in business?\u00a0\u00a0Collect what\u2019s owed to you!<\/strong><\/li>\n
  2. Pay yourself first<\/strong>.\u00a0 It\u2019s hard to make sure you get paid when you\u2019re stressing about paying employees, the electricity bill, rent, for inventory, and all of the other overhead costs.\u00a0 Many business owners put off paying themselves to the very end, but think about the fact that you are the one who started the business and took the risk.\u00a0 While you may not feel you\u2019re the one working the hardest, you ARE the one responsible for keeping things afloat, management, and who took the risk in the first place.<\/li>\n
  3. Don\u2019t be narrow-minded when it comes to accounts payable<\/strong>.\u00a0\u00a0When you\u2019re worrying about how to improve\u00a0cash\u00a0flow\u00a0in business, one of the most important factors to keeping your business \u201cin the black\u201d is\u00a0stretching out your payables<\/strong>.\u00a0 Vendors may require that you pay in 15 or 30 days, 45 days, etc.\u00a0 If you\u2019re a good client, vendors may consider extending your due date for a couple of weeks.\u00a0 Even if you\u2019re detail oriented and want to pay your bills on time, consider stretching it out as long as possible.\u00a0 If a supplier normally requires payment in 30 days but agrees to let you pay in 45 days, you have an extra 15 days to pay, interest free!\u00a0 This allows you an extra two weeks to collect payments from customers to go toward supplier payments and other expenses.<\/li>\n
  4. Next,\u00a0consider getting credit now<\/strong>,\u00a0instead of later when you may be strapped for\u00a0cash.\u00a0 Before you ever open up for business,\u00a0secure credit<\/strong>.\u00a0 Perhaps you have family or friends who could provide funding, or some other form of\u00a0cash\u00a0reserves.\u00a0 The fact is, you need to secure credit early on in the event of a financial crisis, which can (and often does) occur with any business.\u00a0 Those in industries similar to yours can help provide guidance, but be sure you have a\u00a0source of\u00a0cash<\/strong>\u00a0in the event you do find yourself in a jam.\u00a0 If you wait until you can\u2019t pay the bills, it will be difficult if not impossible to find anyone who will lend money to you.\u00a0 Ultimately, securing financing before you need it can help boost morale of employees (no late payroll) and help you avoid passing on a new (and profitable) client.<\/li>\n
  5. Don\u2019t be afraid to turn down business<\/strong>\u00a0if it puts yours at risk.\u00a0 That \u201cbig contract\u201d may sound so appealing, but if the client\u2019s payment terms are 90 days and they won\u2019t budge, it may not be such a good deal.\u00a0 Carefully\u00a0consider all of your finances<\/strong>\u00a0to determine whether you can really carry your business while receiving payment only every three months, or whether it may be your downfall.\u00a0 While every business owner loves nothing better than a sale,\u00a0not every risk is worth taking<\/strong>.\u00a0Before you decide you won\u2019t take on that new client whose payment terms are far out into the future, consider whether it may be possible to entice them to pay earlier.\u00a0 For example, it may be possible to get a large supplier to pay sooner by offering a discount.<\/li>\n
  6. Make paying you as simple as possible<\/strong>.\u00a0 Anyone who has wondered how to improve\u00a0cash\u00a0flow\u00a0in business has eventually learned that\u00a0making payment simple for clients<\/strong>\u00a0is critical.\u00a0 Today our is a technology-driven world.\u00a0 Not only should you accept\u00a0cash\u00a0and checks, but payments via\u00a0Paypal, credit\/debit cards, or other options.\u00a0 Many businesses use online payment solutions today, including online processing services such as Braintree, Stripe,\u00a0Bitcoin, etc.\u00a0 Accepting only\u00a0cash\u00a0or checks is old school, and will likely cost you valuable business.<\/li>\n
  7. Avoid unnecessary costs during startup<\/strong>.\u00a0 The old adage \u201cIt takes money to make money\u201d<\/strong>\u00a0is true, to some extent.\u00a0 However, when you\u2019re concerned about how to improve\u00a0cash\u00a0flow\u00a0in business, it\u2019s important to realize that some expenses aren\u2019t necessary, and that basically all you\u2019re doing is taking away from profits.\u00a0 Splurging on the newest equipment, electronics, or marketing products may impress clients or even your competition, but you don\u2019t need all of the latest gear.\u00a0 Do you really need to attend all those seminars and conferences?\u00a0 Do you look at spending as a way to avoid taxes?\u00a0 These are a few examples of\u00a0spending mistakes businesses often make during startup<\/strong>, according to QuickBooks.<\/li>\n
  8. Cut overhead costs<\/strong>.\u00a0 You may think you\u2019re already down to the bare essentials \u2013 but are you, really?\u00a0 For instance, you may want to consider hiring a freelancer for non-essential roles, as the cost will be lower overall.\u00a0 Considering all the expenses associated with employees (benefits, office space, equipment, your contribution to Medicare and Social Security taxes, workers\u2019 compensation insurance, etc.), your staff can actually cost you up to 30% more than what you\u2019re paying in wages!\u00a0 Some employees ARE essential, but\u00a0consider your options carefully<\/strong>. Additionally, you may want to consider whether a smaller space would work.\u00a0 Would the landlord lower your rent if you were to offer long-term stability, for example stay in the building\/office for 18 or 24 months?\u00a0 Depending on your situation, you may want to carefully consider purchasing a building with room for tenants, as leasing the additional office space is a great way to supplement your income.\u00a0 This is something you shouldn\u2019t jump into, however; give it careful thought.<\/li>\n
  9. Managing inventory<\/strong>.\u00a0\u00a0While you don\u2019t want to have excess inventory, you want to make sure you don\u2019t run out of a product that sells well either.\u00a0 It\u2019s\u00a0important not to overbuy<\/strong>, or think you have to have every size\/color of every item right away.\u00a0 For most who ask how to improve\u00a0cash\u00a0flow\u00a0in business, the answer is in the inventory!\u00a0 Pareto\u2019s Rule (the 80\/20 rule) holds that in most cases,\u00a080% of a company\u2019s sales come from that 20% of the inventory<\/strong>\u00a0that\u2019s \u201chot,\u201d or the biggest selling category. Many business owners make the mistake (and often don\u2019t even realize it) of adding items and categories over time in a way that\u2019s gradual and almost imperceptible \u2013 until you look on the balance sheet.\u00a0 Try to avoid expanding your products\/categories out of fear you won\u2019t have something a customer is looking for.\u00a0\u00a0Slow-moving or dead inventory will drain your business of\u00a0cash\u00a0<\/strong>faster than any other one factor.<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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    Starting a business is both exciting and frightening<\/strong>.\u00a0 With the biggest concern being how to improve\u00a0cash\u00a0flow\u00a0in business, it\u2019s vital to understand all of the various components of your business and how each could impact your bottom line.\u00a0 By following the suggestions above, your odds of succeeding will increase substantially!<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

    …<\/p>\n","protected":false},"author":1,"featured_media":15988,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[51,52],"tags":[],"class_list":["post-15987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cash-flow","category-startup-business"],"jetpack_featured_media_url":"https:\/\/demos.quickspark.com\/wp-content\/uploads\/2017\/09\/blog3.jpg","_links":{"self":[{"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/posts\/15987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/comments?post=15987"}],"version-history":[{"count":0,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/posts\/15987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/media\/15988"}],"wp:attachment":[{"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/media?parent=15987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/categories?post=15987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demos.quickspark.com\/restaurant\/wp-json\/wp\/v2\/tags?post=15987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}