Few tips to grow your small business
* Try to Base Your Business at Home: This is not possible for all but if you can have a home-based business you can actually save a fortune. You save on expensive commercial rent, which is a recurring expense. As you are based out of your home, you don’t need to commute, so you save on transportation. In addition, your business use of home expenses would qualify for income tax deduction. So just one-step and you have three fold savings.
* Credit Cards: If you are a business that doesn’t accept credit cards, you are actually saying NO to a big segment of your prospective customers. People hate to see cash going out of their pocket and that is why they love credit cards. Accept credit cards, your sale is bound to increase. Not just that, you might be offering credit to your customers and if so, you must have faced the hardship of collecting your receivables and bad debts are just a part of this game. With credit cards your customers can pay easily and you don’t have to think about bad debts. What more, if you have a steady flow of credit card sales, you can qualify for a business cash advance against your future credit card sales receipts. These business cash advances do not have any fixed repayment schedule and are paid off from your credit card sales receipts.
* Don’t Block Your Money in Inventory: Businesses often have a large part of their capital blocked in inventory, not just that if you are maintaining your inventory, you need to store them somewhere; so there is a cost for warehousing / stocking them as well. Avoid this process and try drop shipping. When you make a sale contact, the manufacturer who would ship the product to the customer under your invoice and shipping label. You save on your shipping and warehousing cost and also more money available for other operations.
* Get Your Customer’s to Pay Upfront: Offer special discounts, subscriptions, coupons, gift certificates to customers who pay upfront or customers who purchase for a pre determined amount within a stipulated period. Your sales will increase and people would be more inclined to pay in cash – result: You have more cash at your disposal. Obtaining advance and retainer fees can also be a good way to accumulate cash from your customers.
* Debtors and Creditors: If you can manage your debtors and creditors properly that would probably solve more than 50% of your fund crunches. Try to get extended credit periods and higher credit limits from your creditors. The longer your credit period, the better it is for you. Maintain a strict credit line and systematic collection procedure. You should be able to get more cash from your debtors and hold more cash from your creditors resulting in increased availability of cash and better cash flow.