One challenge many small businesses face is dealing with cash-flow issues. It#s often a feast-or-famine situation. Make these resolutions for your business to improve your company#s cash flow for 2003 and the many years to come.
1. Bill it!
When business is good, it#s really, really good. But often times, just running the business and doing good work leaves you little time for even important details like billing. Make this a priority in your business. Bill projects on a regular basis. If it#s an ongoing or long-term deal, negotiate a regular payment schedule in advance rather than allowing the amount due to add up until completion of the project.
2. Cut #em a deal for fast payment.
Make sure your clients pay you promptly with an incentive for faster payment. Offer a 1 percent or 2 percent discount for payment within 10 days. Getting the money in hand quicker can make a big difference in your cash flow.
3. Weed out the turtles.
Some customers will be slow payers no matter what you do. Nip this in the bud right from the start. Before you take on a new client or customer, do your homework. Check out their credit references. Call other business they#ve worked with and ask about their payment history.
One way to reduce the need for immediate cash is to barter services. Need something from somebody who needs something from you? There#s a win-win situation. But make sure you note this on your taxes # you#re still required to report the value of the barter on your tax return.
5. Reduce your inventory.
You want to provide for your customers what they want, when they want it, but money spent on inventory isn#t providing you with any interest or savings.
6. Look at your loans.
Take time to review the rates and terms of your loans. Perhaps it#s time to consolidate loans into a lower-interest account. Extending your loan payments may not be ideal, but if cash flow is an issue, this can help out tremendously if your payments are reduced each month.
7. Give gifts to say thanks.
Yes, giving gifts can actually help your cash flow. If you want to say #thank you# to a client, give a gift instead of taking them to lunch. You can only deduct half of the cost of a meal on your taxes, but if you give a gift (or gift certificate) for up to $25, you can write off the entire cost.
Make these resolutions and watch the cash flow improve. But now that your business is in shape, it#s time to work on you. So where do you want to start? 1. Join a gym. 2. Eat less chocolate. 3. Drive slower&