The debts are creeping in, but the business isn’t making enough money to cover them and the other expenses you need to afford to keep the business going.
So what do you do? You exhaust every option at your disposal to find a solution to your company’s cash flow problem – fast!
You should rule your money.
Money shouldn’t rule your life.
– Jaime Tardy
If your cash flow is insufficient because you have a few accounts that haven’t paid their invoice in full, or at all, it’s time to chase up these customers to claim what they owe you.
However, if you’re struggling to get in touch with your customers, think about using skiptracing software to help you find customers that may have skipped town.
Getting back what’s owed to you is one step in the right direction towards bumping up your business income and managing your company cash flow.
Organize your finances in terms of urgency to decipher what needs paying and managing first.
For instance, if the rent on your business premises is due. Contact your landlord to explain your situation immediately and attempt to devise a plan that works for both of you to repay the money you owe.
Talking with your creditors and bill providers is one way to try and solve your cash flow problem. Depending on your circumstances, they may offer you a payment holiday or reduce your payments.
Can you afford to borrow money from a close family member? Ideally, this should be someone you can trust and vice versa.
This tends to be a much better option to consider before requesting a loan from the bank. Because, by borrowing from someone you know, you’re less likely to need to pay interest.
However, if you borrow from the bank or any other lender, you’ll need to pay interest on top of the lump sum you borrow. When you need to repay the loan, your business could be under more pressure to keep on top of the repayment plan.
Borrowing money from friends or family can sometimes help to bridge the gap to get your business back on its feet.
Trimming your business outgoings can make a big difference to your company’s cash flow.
For instance, you could choose to outsource services, as opposed to having in-house teams. Other solutions include changing bill providers to secure cheaper rates or downsizing your business premises to somewhere more affordable.
Cutbacks can often make business owners uncomfortable, particularly when it concerns letting employees go. But for the sake of your company’s cash flow and to remain afloat so that the business may see brighter days, cutting back now is essential to save the company’s future.
At one point or another, companies are likely to experience cash flow problems. The best advice for any business in this position is to face cash flow problems head-on and exercise any solutions or ideas you have immediately. Ignoring cash flow problems, on the other hand, is detrimental to your business livelihood.