The problem with starting a small business is that owners feel they want to be seen as the nice guy with their customers by extending them credit. Take an honest look at your cash flow.
What can you do now for extra cash flow so you can grow without increasing debt?
After starting a small business you feel your business is beginning to take off and you want to expand. Something is amiss… where will the money come from to fund your growth? You don’t like the idea of borrowing from your family and even the idea of banks makes you feel trapped. What can you do to find that extra cash flow without going into more debt?
The problem with starting a small business is that owners feel they want to be seen as the nice guy with their customers by extending them credit. Take an honest look at your cash flow. Is it where it could be? Are there any slow payers?
Business should live by this simple rule: Pay your bills slowly but collect your debts quickly.
TIP: Keep on top of slow payers and you will sleep well at night
Set up a 14, 30 and 60 day debt management system. Send out a friendly reminder at day 14 explaining that the account is due soon. Set up a series of three letters demanding payment at day 30 and so on.
TIP: Businesses have no obligation to friends or relatives. ASK for your money! You’ve earned it!
When starting a small business keep your cash flow healthy by slowing down your payments to stakeholders and service providers at least until the last day of the payment cycle and even longer if possible. You may consider paying bills on time, a noble thing but that's the voice of inexperience. You could save up to $10,000 a month in interest by keeping the money in the short term money market.
Negotiate better payment terms with your suppliers. I know of small business owners who have saved more than $100,000 a year using this technique alone. At the same time consider raising your prices or increasing your fees. Remember you can afford to lose up to 20% of your existing customers with a substantial increase in price. Do your figures on what you can sustain in your business.
One way to increase your income when starting a small business is to send out a letter to your best customers asking them to buy an ongoing product package per month from you [value package]. For a hairdresser for example it could include12 free blow dries, 6 conditioning treatments and a cut 3 times a year for $80 a month.
Normally this might cost around $1,395 for the year but the package is offering convenience and value for $96.00. If you have 1,000 customers and only 20% take you up on the offer, you will have a monthly increase in cash flow of $16,000 a month for the next year.
Guide to Starting a Small Business
Fear of starting a business can be overwhelming but is achievable without a lot of risk. This is a guide to starting a small business using ideas from the Internet.
Success and Success Rules!
Success and Success Rules! Life as in business there are rules to live by. Sometimes if you break the rules there are severe penalties to pay. Here a...![To build a million dollar business [Part one]](https://cdn.articlesfactory.com/cdn/img/relative3.webp)
To build a million dollar business [Part one]
Even though i had the right mindset more was required. When i started as a self employed businessman i used to look at successful business people and envy their million-dollar lifestyles.
