With the continued uncertainty of political movements such as Brexit, it can be a tricky time for business owners to manage their assets as they wait on major decisions that could dramatically affect their small business. This is making cash-flow management an important consideration to ensure that small entities can ease any concerns if finances become an issue in this period of unpredictability.
Thankfully, there are various schemes and steps that can ease the pressure on small businesses to help improve cash flow immediately in times of worry. Here are a few that can provide you with food for thought:
Free up assets
Whilst it can be a privilege to own many assets whilst owning a small business, it can also be a hindrance to your success. If you find that your finances are lurking over the red, it would be a good time to consider re-evaluating the assets that you currently own and whether there’s room to sell. If you feel that’s not an option, you could consider leasing out some assets to generate some extra cash.
Encourage good working relationships
Being a people person in business can be a great benefit. Developing good relationships with buyers and suppliers can provide the opportunity for leniency in negotiations if you feel as though income is becoming a problem. At the same time, you need to keep in mind that will be a two-way avenue and in future instances you may need to return the favour.
Project cash flow forecasting
Producing a cash flow forecast can help you to plan for the future. Although there may still be uncertainty in the current climate, it can help you to understand the best and worst case scenarios from the estimated projections that you make. Therefore, you can plan for the future if you feel there’s likely to be a shortfall in particular periods of the month.
On top of this, it can also be beneficial towards your future business strategy as the figures that are produced will help to inform your wider business plan.
Hurry your invoice process
If you’re seriously struggling for cash, it means that you’re likely to need funds urgently. So, as soon as you have completed a project or task for a client you should look to provide them with the invoice as soon as possible. This will help to put it on their radar sooner rather than later and avoid any potential delays. At the same time, don’t allow easy mistakes delay you receiving the money. Ensure the job is completed to a higher standard first and then produce the invoice to go along with it.
Explore banking alternatives
In some cases, there have been examples where banks aren’t considered helpful or trustworthy to provide credit when it’s needed. Therefore, if you’re requiring funding as soon as you can it may be worth exploring alternatives to services offered by banks. Ultimately, it may be down to going directly to lending specialists that deal with loans or even consider mezzanine financing if finances are extremely stretched. Other options can include crowdfunding or peer to peer lending which can help release funds a lot quicker compared to other methods.
Even when times are hard there are still options available to ensure your business can remain a success. Whether it’s making projections or taking risks, there will be a method that’s suitable for you and your current situation.