Recently, Bob Coleman of the Coleman Report wrote an article about the major concerns small business owners have. The number one reason he gave won’t surprise anyone.
Without good cash flow, you’re worried about how you’re going to pay your employees, how you’re going to pay your partners, and how you’re going to keep the electricity on. Not only that, you’re worried about the money you’re going to have for you and your families own needs.
Clearly, this is a stressful area and a common problem. What’s a small business owner to do?
For cash flow problems, there are really only three solutions: cut costs, build revenue, and obtain more capital. Let’s talk about these three things and get you that cash buffer that’s going to help you sleep better at night.
As Poor Richard said, “A penny saved, is a penny earned.” Finding ways to cut costs in your own business can be a rewarding experience that will help your business in the short and long term.
But where do you start?
Before you cut jobs, which is usually a business owner’s very last resort, look at some of your optional expenses. For example, are there any software tools you’re not using? Look at your monthly bills and make sure you can justify every single expense on there. Is there any way you can talk your vendors into giving you a better price? Is there something you just don’t need?
Cut your costs, and you’ll open up more money to expand, and you’ll be able to build that cash buffer that’s going to help you sleep better at night.
Clearly, this is every business owners goal. When you increase revenue, you can expand your business, which will bring in more revenue, making you, your business, and your family more comfortable. But how do you begin?
One great tip that has worked well in the past is a simple one.
Ask your best customer how to increase your revenue.
It’s really that simple. Most businesses have a customer that just loves your brand (if you don’t, you should dedicate your next few months to getting one) and wants you to succeed. These customers often have insights, and will often give referrals. Sometimes, it’ll be a product they wished you carried, or a demographic you hadn’t thought of reaching out to.
Either way, when you ask a trusted loyal customer what the next step for your business is, you’re going to get some good feedback that will help you reach your revenue goals.
Obtain more capital
One of the biggest mistakes businesses make is they wait to get a business loan before it’s too late. Not only does their business look bad because they’re in emergency mode, they often don’t have time to go through the long lending process at a bank.
Business owners need to find capital before their business needs it.
Lines of credit are great for this, because you only take the money when you need it. That way, you get a large sum available when your business is good, but you have that buffer for when the going get’s rough. This buffer of capital is going to bring you less stress and better sleep. You can actually find lines of credit and other forms of capital through the Lendio process, it’s free and we’ll help you find the best loan option for your business.
Everyone has stress in their life, but business owners really feel it when they’re running low on cash. By working using these three solutions, you can finally get the rest you need, and feel excited about your business again.
What other things keep you up at night?