The best entrepreneurs are great at cash flow management. But maintaining a healthy cash flow is a serious skill — one that requires time and experience to master. Learning how to take control of your cash flow will help you become much more confident as a woman in the business world. Wondering where to start? Here are some tips to help you grow your business through smart cash flow management practices.
Take it to the Next Level
If you’re currently operating your business as a sole proprietorship or an LLC, this could be a good time to take things a step further and form a corporation. Corporations enjoy many benefits over other business structures. For example, becoming a corporation will offer robust protection from personal liability and enable you to access capital through publicly-traded stock. Just keep in mind that different types of corporations offer slightly different benefits, so make sure you take the time to learn about your options before forming your own.
Use Invoicing Software for Greater Payment Efficiency
One easy way to improve your cash flow is to take advantage of invoicing software to automate and streamline your invoicing process. The faster you can get invoices to your clients, the faster you can get paid. Invoicing software can also help you avoid late payments and non-payment issues that could jeopardize your cash flow. For example, you could use your invoicing program to offer discounts to clients who pay within a certain timeframe or issue late fees to those who don’t meet your deadlines.
Invest in Marketing
If you’re looking for ways to bring in more money, marketing is a great place to start. Many small business owners just don’t invest enough into marketing. With a great digital marketing strategy, every dollar you put into marketing your business should turn a profit. Digital marketing is extremely cost-effective compared to traditional marketing strategies like newspaper ads and billboards, so you shouldn’t have to take out a loan to get started. Focus on affordable digital marketing techniques like email marketing, social media marketing, and content creation.
Keep Cash on Hand for Emergencies
While it’s true that you often have to spend money to make money, sometimes it pays to keep a little cash on hand. Try to set aside a portion of your weekly profits in a separate savings account instead of funneling every penny back into your business. Having this cash available for emergencies will help you avoid taking on debt when sales dip. This way, you can keep your cash flow consistent instead of adding additional expenses in the form of interest payments.
Open the Right Account
If you’re still combining your personal and business finances, this sets you up for numerous complications, especially as your business grows. By intermingling your finances, you’ll never be able to truly manage your cash flow. As soon as possible, open an online business checking account. A bank account tailored for small businesses is a godsend on its own. However, one with enhanced convenience features like entry-free bookkeeping, instant deposit, ACH transfers, and cash flow projection insights allows you to double-down on keeping your finances in check.
Look for Ways to Cut Costs
Improving your cash flow is about more than just increasing the amount of money that comes into your business. You should also look for ways to reduce the amount of cash that goes out. Target your bottom line and find ways to boost it. This could mean hiring freelancers instead of employees, running your business from home instead of renting an office space, or contacting your suppliers and asking for discounts. If you run your business out of an office or retail space, consider implementing energy-saving measures to reduce your utility bills or encouraging your employees to telecommute.
Cash flow is an incredibly important topic that many business owners overlook. It’s easy to assume your business is doing well when you’re making sales and earning money, but you never really know what’s going on until you start diving deeper into your financial data and having conversations about cash flow. We must ensure female business leaders have the tools and financial knowledge they need to thrive as entrepreneurs.
As your business grows, so too will your wealth and the prosperity of your venture.