Since cash flow is the life blood of your organization, you always want to increase it. With all of the financial obligations you have, sometimes it seems impossible. Follow these steps and you will see your cash increase.
Difficulty: Average
Time Required: Ongoing
Here's How:
- Reduce your amount of fixed capital. This first step is the hardest. Fixed capital is the money you need to support the level of your business. Try to find ways to lower your rent and building expenses, staff expenses, office expenses, sales expenses, and anything else you think is "fixed." This will free up cash for your business.
- Take stock of your inventory. Don't stock too much inventory because you may not be able to sell it. Sell what you have before ordering more inventory to avoid overstocking. On the other hand, don't stock out. Have enough inventory on hand to meet your customers' needs. If your customers want to buy and you don't have enough product, you will lose customer good will. You have to strike a balance between too much and enough inventory.
- Take a look at your prices. When is the last time you have changed your prices? Have your prices kept up with industry average prices? Check out your competition and see what their prices are. Make sure you are in line with the industry. Customers actually expect small, regular price increases.
- Don't buy your supplies all in one place. You may want to buy your computer hardware from one supplier, but your computer supplies, such as inkjet cartridges, from a mail order catalog or off the Internet. Scout out different types of suppliers for different types of supplies and compare the prices that you can get. Only buy in bulk if you think you'll use the larger in amount of supplies in a reasonable amount of time.
What You Need:
- A list of all your expenses
- A list of your current suppliers
- Your computer to search the Internet
