When running a business, you should be concerned not only with making money but also with having a consistent income. It’s far better to have a streak of good months than to have a great one followed by several catastrophes. While the quality of your product is always important, it’s also good to give attention to other factors. These are things you can to make sure your cash flow stays in good shape.
Raise Prices or Cut Costs
Having money come through doesn’t always guarantee that you’ll be in the black. While you might have a loyal customer base, you could find that your costs are exceeding your revenue or nearing that point. If this is the case, you may have to make the tough decision to either bump your prices or cut some costs. Suddenly raising your prices massively won’t do any good, as you’ll turn off both your current customer bases as well as new business. However, a light, gradual increase should not be considered out of the question. People wanting to use your business should understand that this can include paying more than they initially did.
Make Sure Customers Pay on Time
Your business might offer services where people don’t need to pay immediately. This can be nice for your customers, but it can be very difficult for you. It can be time to pay the bills, and you may find yourself hounding people for payment. To keep customers from taking advantage of you, you need to make sure they pay in a timely fashion. It hopefully won’t have to come to this point, but bringing legal professionals in can help to change the tune of someone who’s really refusing to pay up. According to Dolman Law, customers tend to be quicker to pay when you dispatch your attorney to remind them. Giving them a contract to sign can also stipulate what is expected in terms of payment. You can help them to realize that the negative effects of not paying can be very severe.
Keep a Savings Account
According to Patriot Software, savings accounts are important for businesses, just as they are for individuals and families. You can also be struck by an emergency such as a break-in or a weather disaster. While insurance can help in these cases, having funds put aside for your business can help even more. Discuss opening a business savings account with your bank. Have a plan to put a set amount of profits away each week and let it accumulate interest. This account should only be tapped into when you face an absolute emergency with no other options. But having these funds available can help you face an emergency without feeling like it’s beyond hope and completely out of your control.
Don’t kick yourself if you’re starting to feel the hindsight coming on. All business owners have to learn at least some lessons along the way. You should just be relieved that you were able to develop your resilience before things took a permanent turn for the worst. By vowing to keep your cash flow in a better situation, you can avoid falling into traps that can ensnare fledgling businesses.
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