Today I wanted to share with you 6 cash flow management tips to boost your bottom line.
1. Create a systematic way to manage both your cash in and your cash out. If your collections of accounts receivable are slow, now is not the time to be adding a lot of expenses. Manage your cash flow both ways and in relationship to all aspects of your business. Be willing to quickly dial down your expenses if revenues slow.
2. Watch your business sales cycles and make sure you’re not building up assets, inventory, or staffing at a time when business is about to slow down.
3. Consider not prepaying too many expenses unless you are given a business reason to do so (e.g. a meaningful discount). Sometimes it is better to pay monthly to guard cash flow rather than pay annually up front.
4. Consolidate your purchases and negotiate better pricing. This is especially important for companies that have gone through a recent burst of growth. buy prescription drugs without a prescription Too often we see companies paying prices based on purchase volumes that they far exceed.
5. Get competitive bids from vendors. Even if you plan on staying with your current vendor the very fact that you know and they know that you’re getting outside bids will keep their pencils sharp and help ensure you get better pricing.
6. Train your staff to ask for and get discounts. A short training course on how your team can get discounts, plus consistent recognition for people who do this for you, pays off handsomely in increased cash flow. This one idea alone could reduce your variable expenses by 5-10 percent!
Here is a simple 3-question sequence to ask (in the stated order) all of your vendors so that you get a better deal.
Question One: “Every business has competition. And all smart business owners know who their main competitors really are. So tell me, which competitor of yours do you have to fight the hardest with in your niche?
Question Two: “When you lose business to this competitor, what do you think is the biggest reason why this person would choose your competitor over you?”
Question Three: “What can you offer us so that we as customers would find so compelling, such a great deal, that we’d just say yes to it on the spot instead of going over to your competitor to get a bid or quote from them?”
I hope you got a lot from this short post today. All I ask is that you never use tip 6 with us!
All kidding aside, have a great week.