Any business owner will agree that an increase in their cash flow is never a bad thing. Although selling more products or gaining more customers may seem the most obvious ways to do this, there are other, more behind-the-scenes ways to go about bringing more money into your business. Here are three ways to increase your business’s cash flow that don’t have to do directly with selling more.
Stick To a Budget
Sticking to a budget is important to do in any aspect of life, but especially so when it comes to your business. Having a clear, set budget when you begin the day, month, quarter, and year will ensure that you always know about where you stand when it comes to your money. If you don’t have a solid budget to stick to, you will almost definitely get muddled up in all the transactions and expenses in your daily business dealings. Budgeting out all of your expenses (and planning for the ones you might not see coming) will keep the maximum amount of working capital in your hands, and you won’t lose money on poor planning.
Never Have More Than a 50% Income-Debt Ratio
While nobody wants to be in debt, often times it’s unavoidable when you’re opening or growing your own business. In fact, if done smartly and well-planned, it could be very beneficial to business and get you more profit in the long run. However, you never want to get yourself into a situation where you are making less money than you owe. If you find yourself in a situation where you are coming to a breakeven point, don’t take out any more debt until you get it handled. It’s a very slippery slope when you are not pulling in enough cash to at least equal what you are putting out.
Only Put Business Expenses On Your Business Account
If you start making money from your business, it can be very tempting to start buying yourself personal things here and there. Even if these expenses are small, it’s very important to keep your business expenses and your personal ones completely separate. It can be only too easy to get caught up in spending on things you want here and there and find yourself in a situation where you don’t have enough revenue to take care of your business’s expenses (this is especially dangerous when there are unseen/emergency costs). It’s better to create a budget (see tip #1) and set aside revenue coming from your business, to pay for itself. Once you finish this, and you have your profit, you can put that into your own personal account, and use it as you will. This clear separation will help you stay organized and make sure you aren’t left high and dry when it comes to keeping your business afloat.
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