Cash flow is the key to success for any entprepreneur. If your company runs out of money, how will you be able to pay your bills, suppliers, employees, or other expenses? Without cash, you won’t have the flexibility you need to make decisions that will improve the long-term health of your businesss.
A lack of cash results in not being able to invest in the development of new products or have enough money to stay current with your vendor bills. With these risks in mind, here are a few ways that you can help reserve money for your future needs.
1. Speak with Your Bank
You will find that most banks are sympathetic to businesses that find themselves in financial crisis. Thankfully, you may have access to low-interest loans when an emergency strikes. But don’t wait until you need the funds to begin the process. Develop a relationship with your bank which can make a difference if the time comes when you need a loan. If you already have a line of credit available, be sure to chat with your bank if you need to increase the amount available to use.
2. Contact Your Customers and Vendors
If you are looking to save money, consider working with your vendors to amend their terms to see if you can get discounts for paying early. On the other hand, if you are struggling, request a payment extension if you need to hold on to more cash. When it comes to customers, take a look at which customers are slow paying. Contact them via email or phone to remind them of their balances and make payment arrangements.
3. Review Your Finances
Take the time to do a full financial review and see where your cash is going. It may be beneficial to cancel unnecessary recurring charges for services. After reviewing your bookkeeping, you may find that you need to hold off on projects that you had planned until you get your business back into a healthy spot.
During a financial crisis, conserving cash is the smartest thing you can do for your business. Cash flow helps you remain flexible and resilient. Thankfully, there are many ways for you to improve your cash flow. If you need help reviewing your finances and coming up with a plan, my staff is ready to help. Reach out to us at 310-534-5577 or [email protected]. You will be better prepared for an emergency, and you will be able to positively impact the long-term health of your business.
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