4 Areas and Questions to Improve Cash Flow
Cash Flow is the life blood of any and every business. Cash is king and your business needs it to stay alive. Below are 4 areas and questions to help you improve the cash flow of your business.
- Do you have a system that helps you identify what needs to be paid, how much and when?
- How much does it cost you in fixed expenses to run your business each month?
- How do you make purchase decisions – Need, Want or Return on Investment?
- When did you last review your spending habits and determine if you could do better?
- Have you price or value shopped the services or products you currently use – telephone, cable, auto, life, health and liability insurances, supplies, etc.
- Are there products and services you can buy in bulk to reduce your costs?
- Have you tried to negotiate new payment terms – Net 30, Net 60, 2%-10 Days, Pre-Payment discounts – in order to conserve cash?
- Are there items where it would be better to own than to rent or rent than own – Car, trucks, furniture, buildings?
- Can you use independent contractors – legally, rather than employees?
- Do you bill clearly, accurately and on time?
- Do you or can you offer multiple payment methods?
- Do you have or can you enforce late payment fees?
- Are you in regular contact with your clients and their payables department?
- Can you legally discontinue services for non-payment?
- If billing is based on hours or items quantity, can you move to a fixed fee model?
- Can you bill prior to rendering service instead of after?
- Are your billing and payment terms easily understood and agreed upon?
- Can you arrange to only accept only cash, credit card or debit card?
- Do your sales prices cover all your business costs?
- Do you know what your costs are in order to properly set your sales prices?
- How can you raise the value of your products in order to raise your price?
- How can you lower your costs to maintain your sales prices and still increase your profits?
- Do you have a qualified prospect?
- Deos the prospect have a real and verifiable need?
- Does the prospect realize what the problem is costing them?
- Does the prospect have the authority to make a purchase decision?
- Are you focusing on the right market?
- Are you offering the right product?
- Do you have a teachable and repeatable sales process?
- Are your sales people properly trained?
- Have you educated your clients how to buy?
Give consideration to these questions and apply them to help your business. If it would help, give us a call us at 240-356-5050 for a cash flow planning session and let’s stop the bleeding.