Cash flow tips for small business will help you make important decisions…better. Cash flow has often been called the lifeblood of any organization. That’s why you need to know everything you can about how to optimize it, so you can make sure your business is healthy and thriving.
We recently asked experts and small business veterans to give us their top cash flow tips for small business. We got some great tips from Rob Robinson, co-founder of Discount Party Supplies, a leading online retailer of party supplies for all occasions.
Here’s Rob’s cash flow tips:
GET AN EMERGENCY FUND…PRONTO: If possible, set aside cash to cover unforeseen cash flow shortages. An emergency fund can help you ride out the inevitable times when cash flow is strained.
PAY OFF YOUR CREDIT BALANCES EACH MONTH: If you don’t have an emergency fund, a credit card may be a short-term solution, but make sure that you can pay off any balance before interest charges creep in.
ENFORCE YOUR PAYMENT TERMS: You can’t let customers walk all over you when it comes to payment terms because some will. Clearly communicated payment terms should be established and you should be prepared to enforce them with penalties or other means. Realize that if you bend the rules once, you will likely be asked to bend them again later on.
YOU’VE GOTTA GIVE ‘EM CREDIT: Depending on the business, it may be possible to acquire credit card authorization from your customers. In past business dealings, this has helped keep slow payers up-to-date.
SALES ROCKET, BUT WHAT ABOUT YOUR VENDORS? An increase in sales can be a cash flow difficulty if the goods you are selling need payment sooner than you’ll receive payment from your customers. Keep this in mind and set aside funds or seek up-front payment when permitted. If you must extend longer terms to your customers than you yourself receive, be sure that you are communicating your situation with your vendors.
JUST BEAT IT: Cut loose deadbeat customers and focus your attention elsewhere. As an entrepreneur, I understand the temptation of accepting risky customers when you’re trying to get your business established. However, dealing with risky customers will get you burned more often than not.
Solid advice from a veteran small-business owner: thanks Rob! If you’d like to contact Rob directly, please see below:
Rob Robinson, Co-Founder www.DiscountPartySupplies.com 1-888-833-0302
Stay tuned for even more tips from the pros. And don’t forget to check out our concise overview of top cash flow tips for your small business!
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