January is such an expensive month.. both in business and personally, so I thought I would look at 5 ways you can improve your cash flow. For a free excel template on cash flow checkout the downloads page on the site. The first thing you need to do to improve your cash flow is to be clear how much you are spending.. write down everything you spend. The next step is to look at ways to reduce the cash going out… here are five tips to help you think about reducing your cash flow.
1) Raise Cash from Unused Assets
A number of therapists I know set up their business by buying lots of equipment most of which lies idle. Don’t take up the space….If you have assets you don’t use sell them on bay.
2) Minimise Costs and defer payments out where you can
What can you rent or borrow rather than pay for it outright… especially if you will use it only once or twice. Can you buy items using a credit card rather than cash ( pay off the following month of course… you do not want to rack up debt with the ridiculous interest rates).
3) Allow For Delays in Income Coming In -what can you do to bring forward receipts from customers and clients?
If you are doing work for and will be billing a large organisation ( such as a company or the NHS) you will need to factor into your price the fact that they will not pay you for maybe 90 days after you have provided the service and increase the price to them to cover your interest costs. Otherwise you should be getting all payments up front.
4) Market to your existing client base to provide additional services or products
Follow up with your clients and offer additional sessions or products to increase your income. It is much cheaper to market to people who have already bought from you because they trust you and hopefully! like you.
5) Give Discounts for those paying in advance
Offer a discount for those who pay for a series of sessions up front ( but be aware of matching as mentioned earlier).
And finally a Bonus Tip…
6) Substitute or eliminate unnecessary costs
Review your ongoing costs.. what can be eliminated or substituted without having a large impact on sales… do you really need very expensive flowers in reception?
By looking at your cash flow on an ongoing basis and controlling your costs… even quite small amounts can add up… you are in a much healthier positino to take advantage of any opportunities you have.