For business owners, having a free cash flow is understandably a primary concern. Cash flow is needed to keep up with bills and invoices, pay employees and to give you the means to grow your business. It’s a sad reality that many businesses find that they simply don’t have the cash flow to operate successfully. Thankfully, there are some easy steps you can take to make sure you have free cash flow.
Freeing up your cash flow
Stay on top of debtors – Although most of us don’t particularly like having to follow up with debtors, it’s vital to the cash flow of your business and ensures a steady flow of income. Be clear about your payment terms and follow up with debtors on a regular basis. Even if the amounts owing are relatively small, it all adds up and can make a big difference to your cash flow.
Increase prices – If you’ve been providing the same prices on your products or services for some time without review, now might be the right time to consider an increase. Have a look at what the competition are charging to make sure you can stay competitive with you prices and it’s always best to opt for a gradual increase.
Reduce overheads – Think carefully about expenses within the business that can be reduced. For example, if you have an office that’s way too big for your current needs, consider moving to smaller premises with lower rent. If you have additional expenses like paying staff overtime, think about putting measures into place to reduce the need for overtime and communicate these changes to staff.
Get professional advice – Your accountant isn’t just for tax time and you can consult with them throughout the year for advice on improving cash flow. Make sure you have an accountant you trust and don’t feel obligated to stay with the same accountant if you feel they’re knowledge isn’t up to scratch. Also, speak with any mentors you may have within the same business area as they will likely give you some pointers.
Review your insurance – Rather than signing up with one insurer and then leaving it at that, review your policies every few months to ensure you’re getting the best coverage at the best price. Have a chat to your insurance broker about your business and they will be able to help find an appropriate insurance package. Also, always let your broker know if there are any changes to the business as this can impact on the cost of your premiums.
Make sure you and your business are covered
As always, one of the most important considerations for your business is having the right business insurance package in place. Without the correct cover, you could find yourself thousands, or even hundreds of thousands, of dollars out of pocket if something goes wrong. Protect yourself and your business by speaking to your insurance broker about your options.
The information above is of a general nature only and should you need advice please consult your insurance broker. For your business insurance needs or for a quote, contact Elliott Insurance Brokers on 1300 635 315 today.