One of the smartest moves to build a healthy business is managing and improving cash flow.
According to Business Insider, approximately 82% of the businesses or startups fail to survive due to the problems in cash flow management.
Cash flow has a dramatic impact on the business and problems in this area lead to failure in small businesses or startups. Here are 5 strategies to survive a cash flow crisis –
- Cut down unnecessary expenses
The first thing that comes to mind while thinking of managing expenses is cutting down the costs. So, cut down all the unnecessary expenses that you can by prioritizing them. Also, you can cut down on a few variable costs by looking for alternatives and spend only on things that generate revenue.
Your employees are one of the most valuable assets of the company, so consider layoffs as the last option.
- Negotiate the payables
If there are a few bills that are not immediate, do not pay the creditors. Be honest, talk to them, and explain the situation to them. If it is urgent, try to negotiate payments as it will help in reducing the strain on the working capital.
- Speed up the receivables
The faster you will get money in business, the faster you will be able to eliminate the cash flow crisis. So, start accelerating the receivables by sending invoices and focusing on the pending amount. Also, be flexible and offer additional payment methods so that your clients pay you faster.
You can also ask for advance payments from your new clients.
- Look for borrowing options
Borrowing is another way to bring cash into your business and solve problems. You can either apply for business loans, go for credit card advance or explore other options too. But make sure that you properly research and understand the interest rates, timeline, and other terms and conditions, before availing of a loan.
- Sell the unnecessary assets
If you are stuck up and want to have some quick cash, you can consider selling the assets you do not need. There are various duplicate assets in a company that is not used at a full capacity. So, you can consider selling those assets.
The most important thing to remember is – NEVER IGNORE A PROBLEM!
If you are facing any problems or looking for someone to manage your cash flow, you can contact Boston Financial Advisory Group (BFAG). We have a team of professionals who can help you with Finance and Accounting.
Get in touch to know more about our services.
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