Part of making every dollar work for you is making sure you’re investing them into the best income-generating practices. It doesn’t make sense just to keep squirrelling money, sometime investing money back into your business through systems etc is the best way to generate more income for the business.
Position your business for growth by focusing on these inflow-increasing practices. Has your business made a habit out of any of them yet?
1. Updating your prices
When was the last time you checked whether your current prices were covering your costs or in line with your competition?
It’s understandable for small business to resist increasing their prices for fear of losing customers But you don’t want to be working for nothing or worse subsidising your business. Make sure your business in making a healthy profit or you will not be in business for much longer!
If your suppliers are charging you more, there’s no way you can cushion this change for long without adjusting your pricing as well. Keep any price changes incremental to ease the transition for both old and new customers.
2. Keeping customers hooked on a service or product
Every business has something of value they can offer to customers, a wise owner knows how to leverage his or her business’s services toward a continuous need. This can ensure a steady stream of income from a particularly loyal customer base.
For example, a pet grooming business could find ways to include monthly flea treatments and regular trims into their services. By linking their skills to customers ongoing needs you get the best mileage out of your products and services.
3. Requiring deposits on large or one-of-a-kind orders
Taking a deposit can lessen the risk of financial losses in the event your customer backs out of a deal or requires something else entirely by the time you’re halfway finished with the job. Plus with more cash coming into the business earlier in the process it will help cover the cost of production or special purchases associate with an order.
Make sure you include this and any other terms in a contact to avoid any difficulties with collections once you’ve delivered the service or product successfully.
4. Working closely with your bank
If you’ve built a great relationship with your bank, chances are, they can help you get through short term gaps between spending on operations and collecting payments after the sale. You may want to discuss an overdraft or short term loan. Arranging this ahead of time will show you understand your business better and make arrange short term finances easier. banks like to know you are in control of your business and understand it.
5. Investing your overflow
A final suggestion would be for you to invest your cash surpluses into profitable accounts or upgrades within the business.
While the former dwells on getting significant returns for your monetary investment, the latter focuses on increasing efficiency, productivity and cost-competitiveness within your business. This, in turn, should help you focus operations on more income-generating efforts.
For more about business and cash flow management, contact Omnis Group at 9380-3555 or 1800 99 66 90. Our friendly team of professional business advisers and accountants are more than willing to help. Contact
