Many businesses go out of business in the first few years due to their poor cash flow and lack of systems. If your work is not completely up to date, then you are likely to start losing money and then, in turn, lose your business. In the IT industry, this means that you must always have enough cash to be able to upgrade your systems as and when, including keeping your IT systems protected with the adequate cyber security. It’s easier than ever to have your identity stolen and you need to avoid this at all costs. If you do not have the up to date systems and applications, then you will not be able to thrive. This means if you’re running a new business, it’s vital to focus not only on earning more revenue. This will then attract more customers and keep your funds active. Being able to improve your cash flow will help in so many ways, to ensure that you always have access to the money you need to handle every day tasks and keep your business above water. So, how do you actually improve your cash flow? There are no quick fixes but there are some quick tips that don’t take much implementing. Make sure your customers pay you on time. This sounds easier said than done. Correct. Believe it or not, delayed payments is one of the biggest factors driving companies low on funds and even out of business. If your customers don’t pay their invoices on time, you won’t have enough money to cover your monthly expenses, such as your staff wages or any other outgoings, including personal ones. This will negatively impact your business and eventually lead you to use your own personal downfall in business. Here are a few tips and tricks for how you can get paid on time and improve the cash flow:
Provide different payment methods: Your customers are also busy and things do slip their mind, it is often their number one excuse when you chase them for the tenth time. Make things easier and more convenient for them by offering other payment methods which aren’t just the standard BACS payments. There are plenty of ways to do this online and make things smoother running and quick.
Reward quick payers: People love rewards and this can work in your favour. Offer customers incentives if they pay their invoices ahead of time. Such as product discounts or vouchers or anything you can get your hands on that will incentify them. You can offer even bigger incentives for paying early, such as a 5% discount if paid upfront but this is your call, but it can be a good tactic to ensure payment is met and you’re not constantly chasing them for money.
Get some accounting software because this is going to help you with your cash flow. Improving your business in any way is difficult because you’re constantly having to look at what needs to be changed and how to go about doing that. You need to find the money to put into other areas of your business, for example, in the IT industry, getting reliable computer systems or investing in a digital marketing specialist to help your business thrive. It’s so essential that you make the most of technology and modern online tools, as we previously talked about, this is going to give you a boost. You may want to look at an IT Support Company to help you with network problems, and also give you a better outlook when it comes to your staff and productivity within the IT industry. Getting the cash flow up will help and although the tools will not give you money they will give you an accurate description of where your money is, who owes you money and who doesn’t, where you need to put your money, and how much to save. Although this comes from your own judgement too. But using online tools will help save your lots of time to ensure you can focus on the things that really matter. You want good customers, who will pay and not spend time working with those who don’t.
Some other quick tips on how to improve your cash flow are:
- Lease, Don’t Buy Your Premises.
- Offer Discounts for Early Payments (as discussed).
- Conduct Customer Credit Checks – Are They Going To Pay On Time?
- Form a Buying Cooperative.
- Improve Your Service List And Keep It Manageable
- Send Invoices Out Immediately – Don’t Delay And Don’t Worry About Looking Cash Hungry, It’s About Survival! And You’re Well Within Your Rights.
- Use Electronic Payments – Speedier And More Efficient.
- Pay Suppliers Less.
This may all sound easier said than done but leasing will save money in the long run because you are not having to pay out all the hidden costs attached to buying, including your responsibility to the building and premises. You need to keep the owness on someone else so you don’t have added burdens and also improving your inventory, or stock and services is going to help because having a clear cut way of doing things is going to help boost your business greatly. You want to have a clear path ahead of you and goals set to be achieved at certain times and if this isn’t doable then it’s important to make it so, somehow. Look at your staff and what they are providing you. Are they working to their full potential or do you need a new turnover? Are you going to be investing your staff for learning more and giving them the chance to blossom further. Your staff are going to drive your business forwards too and if they are not working well enough then things must change. Nothing will change if you don’t work hard but in the IT industry, you can find yourself coming up against certain barriers, so how do we overcome them?
Getting past the barriers
You need to have top quality products or services. One of the quickest ways to set you apart from any competition is to give your customers high-quality products and services at the same price or better than your competitors. Don’t ever undersell yourself but be aware of what others are charging and see if you can undercut them and also show them your quality of work so that you have a great portfolio to sell yourself. Quality is everything when it comes to growing a business and this is why planning and organising is vital to helping give everyone top notch products and giving them what they want and when they want it. Don’t be afraid to get the ball rolling. Improve the cash flow and then use that cash to sink into other areas and give your business the biggest boost.
Here are some steps to help you with thinking on your feet when it comes to improving your business and breaking down those barriers when it comes to money:
- Use sustainability as a unique selling point – what sets you apart and what makes you special? Once you unlock this, you can modify all your campaigns to this.
- Think long term – not just short term, how can your business grow in the long term, what will it need to succeed and how can it succeed.
- Communicate differently – talk to your customers and not down to them, communicate with other people like yourself who can help further your business or even collaborate.
- Embed sustainability throughout your organisation – being generally sustainable will help you with saving money in the long run.
- Improve management skills – it’s all about the way in which you manage your business and the way that other people see you.
- Take risks – this may include looking at new business people to invest in or taking on new staff to help you improve your business.
- Disrupt old business models – if it isn’t working anymore, then don’t hold onto it, get rid of it and look at new ways.
- Network – go to events, see people, talk to old connections and rekindle them too. It is vital to keep a network going and also input this data into a database. In IT you must be sure to do this often
To help improve your business finances and help you a little further with cash building, you should look at the fundamentals of your business which include planning, organizing, leading, and controlling. You should think about the four functions as a process, and work out how to go about it in a cost-effective way. It’s important not to sink too much of your own personal money into your business as this is where things get tricky and you may not ever be able to see a return on that money, so be sure that you are getting funding from the right place and that you are not out of pocket. Unless you have a side hustle that can fund you, then that is just fine but do not sink any personal funds into something that isn’t foolproof.