Operating in a credit-crunching post-GFC business environment has its challenges for small business owners. Customers are increasingly searching for the lowest-cost option and banks aren’t as ready to lend cash to help you get through seasonal downtimes or fund your next growth initiative.How to increase your cash flow without increasing your fees: Ezidebit
The key to success lies with improving the way you do business to achieve internal efficiencies, reduce your operating costs, increase your positive cash flow and ultimately increase your profits. To get you started, here are our top three tips to achieving positive cash flow all year round.
Get business improvement onto your agenda – permanently
The most successful business owners know there’s always scope to improve their internal business processes. They continuously have business improvement on their agenda – and so should you. A review of your internal business processes doesn’t need to cost you the earth in swanky high-paid business consultants. Give a junior member of staff a crash course in process mapping and have them work their way through a list of business processes that are most likely to present opportunities to improve efficiencies through things like automation of manual tasks or removal of work duplication. We suggest you start by reviewing the processes behind managing debits into your organisation, chasing late customer payments and the manual effort that goes into your monthly financial reporting.
Look at your business through cash flow coloured glasses
Your overall cash flow position affects every area of your business, so it needs to be considered a priority if you want your business to be successful in the long term. Think through each of the key areas across your business and consider how each of them is affected each time you run into cash flow problems. Then consider what each of these areas could gain if you were to position cash flow management as a priority for each area.
Make cash flow part of professional development
For even the most experienced workers, finding secure employment with a high-performing company that offers opportunities for professional development is becoming increasingly competitive. Accordingly, your staff have a vested interest in the financial health of the business that keeps them in steady employment – yours.
Make cash flow management a mandatory professional development item for your key staff. Ask your finance manager to share monthly cash flow reports with senior staff, explain how the numbers in those reports affect the business and encourage discussion amongst the group.
Over time, these cash flow meetings will up-skill your senior staff and improve cash flow management across your business.
Turn that knowledge into action
Now that you’re all up to speed on how achieving internal efficiencies and reducing your operating costs can increase your positive cash flow (and your profits), it’s important that you put your knowledge into action so your business can start reaping the benefits fast. Our four-point actions list will get you on your way:Team up with a diligent junior member of staff to get your business improvement schedule underway. Send them on a one-day introductory course in process mapping and get them working through your business improvement list.
Make a wish list of what each of the key areas across your business could achieve if they were to have guaranteed positive cash flow. Write ‘CASH FLOW GOALS’ at the top of the list and stick it somewhere obvious – the back of the bathroom door is the perfect place to guarantee frequent visibility and valuable quiet time to ponder your progress towards each goal!
Email out that recurring calendar invitation for key staff to attend your finance manager’s monthly cash flow meeting. Mark attendance as ‘mandatory’.
Check out our case study collection and discover how other successful small business owners have improved their cash flow position using our tips.