Maintaining cash flow is a common challenge for entrepreneurs. If you happen to be running a seasonal business or often face periods of slowness, there are certain times of years that can prove truly difficult to get through. Although you’re seeing a significant decrease in your sales the cost of operating expenses remains the same. To keep from ruining your business and staying afloat during those down times, finding solutions to increase your cash flow is imperative.
Borrow the Money
One of the first solutions entrepreneurs look to when short on cash is a loan. There are several types of loan options available to small businesses and individuals alike that can help tide you over until your season of abundance starts up again. You’ll want to review these options carefully because while the initial funds from the loan will aid you in staying afloat, failure to timely repay it will cause more financial stress. Here are two common loans to consider increasing cash flow:
Installment Loans – Perhaps you’re not seriously hard up for cash and you just need a few hundred bucks to handle some matters while you wait for more money to start rolling in. Easy installment loans are ideal for this very situation. They are a lot easier to qualify for than traditional loans and can be repaid in small increments over the course of time.
Personal Loans – Personal loans are another option to increase company cash flow, however, they are a lot more difficult to qualify for than an installment loan. They also often require an impeccable credit history and in some cases collateral. While they also take longer to process, this is an ideal lending solution for entrepreneurs who need more than $1200 and need to borrow it for more than a few months.
Collect on Accounts Receivable
For some entrepreneurs, the issue of cash flow has nothing to do with the season and all to do with outstanding accounts. When providing customers with a product or service prior to payment it is imperative that you set clear guidelines on how you intend to be repaid and what the consequences will be if you are not. If you have a lot of outstanding accounts from customers pick up the phone and reach out to them. Find out if you can set up a payment arrangement to get some of the money in or even offer them a settlement just to resolve the account. This can increase your cash flow quickly.
Consider Invoice Factoring
If you’re unsuccessful in collecting on old accounts to increase cash flow you can always consider invoice factoring. This is the process of selling your outstanding accounts to a service provider. They will in turn pay you for the invoices (less than what’s actually owed to you, but more than you have now) and continue collecting on the accounts themselves. This can be a great way to boost your cash flow and reduce your debts.
Consider a Side Hustle or Part-time Gig
While you may already think of your business as a side hustle it may be necessary for you to start bringing in more money from other sources. Taking on a side job on the weekends or working for someone a few hours a week can add money back to your pockets allowing you to get through those slow periods. Try to choose something that won’t conflict with your ability to manage your business and that you already have the skills to complete. This will prevent you from wasting too much time on your new side hustle.
In the world of business cash is everything. While having an emergency savings and proper management of cash flow can prevent serious financial disasters, when you need to increase cash flow the above-mentioned tips should do the trick. You can add hundreds if not thousands of dollars to your business keeping you afloat all year long.