5 Ways to Increase Cash Flow in 2023
Cash is greater than profit. That might sound strange but it’s true.
Your business could be showing a profit but when you look at your bank account, you feel the squeeze of not having enough cash.
Ever lay awake worrying about if you’ll be able to pay your employees? Do you find yourself shuffling vendor bills to try to stagger them so you can make ends meet? Are you still not able to pay yourself the salary from your business that you’ve always wanted?
These are all symptoms of not having enough cash in your business. These are signs your business isn’t as healthy as your profit and loss statement might make it seem.
So if you’re looking to increase cash flow in your business this year, here are five things to look at.
1. Review your vendors and suppliers. Have you reviewed your terms with your vendors recently? Look at things like your credit terms and pricing. If you have a good relationship with your vendors, try to negotiate better terms and pricing. Doing this will increase and keep cash in your hand longer.
2. Have you looked at what you’re spending your money on? When’s the last time you reviewed your business expenses to see if you’re paying for things that aren’t necessary? Look for things like subscriptions you are paying for that you don’t need or software that you’re still paying for but no longer need. Another area to check is credit card fees you’re paying. See if you can switch to using ACH instead to save on fees. Even if there are areas you can cut temporarily it will help to get your cash flowing in the right direction.
3. Are your customers paying on time? If you invoice customers and they’re late paying or not paying at all, this is an issue and will negatively affect cash flow. Review your accounts receivable aging and determine if there are any invoices that are overdue that you can collect. If you find that customers aren’t paying timely, review your collection process. Do you regularly review late customers? Do you have a collection process in place?
4. Review products and services. If you haven’t reviewed your products and services lately to determine which are selling and which aren’t and if you’re charging the correct price for items, it’s time to take a look. Are your products and services priced right compared to competitors? Are you making a profit on all products and services? Review products and services and raise prices where necessary so that your priced competitively and making a profit on each item you sell.
5. Step up marketing and sales efforts. Have you been using the same marketing approaches for a while? Try changing things up to engage your customers again so they’ll purchase from you. Determine where most of your customers come from and step up marketing areas accordingly. Also, investigate new markets or niches you can explore.
Do you have a defined sales process? Can your customers easily purchase from you without jumping through hoops? Too many steps in the process or no clear way to make a purchase may cause you to lose customers. Develop processes that make it easy for customers to buy from you.
Which of these things will you try in 2023?
If you’re ready to really amp up your business growth in 2023 reach out to us. We specialize in helping ecommerce businesses and service providers have more cash and profit so they can grow.
