One of the biggest challenges facing businesses is cash flow. Mastering this facet of business can mean the difference between success and failure. Without proper planning, business owners and managers are often left scrambling and end up making rash decisions such as laying off key personnel in an effort to stay afloat. Here are three easy to implement strategies that can help you manage your business finances.
1. Reduce Expenses. At face value, this sounds simple, but most people don’t know where to start when trying to cut expenses. The last place you want to cut is the salary of your key staff members. Sure, it can make a big change in numbers, but it also can have a negative impact in morale. Look to services such as telecom, cell phones, ISP, insurance, and outside vendors first. Don’t always sacrifice quality to save a buck either because in the long run, this will end up costing you more money. When in doubt, find a cost reduction specialist that can help you. These advisors are worth every penny they earn, and it is usually based on what they save you.
2. Factoring. If you have invoices that are paid consistently, but not immediately, you might want to consider invoice factoring. This is a method where you sell your invoices that are pending at a discount. The upside is that you can get money up front, but the down sides are that you lose some money and if you don’t have a full financial recovery plan, it can be hard to get out of the cycle of factoring. Factoring is the most costly of the three and should be considered as a last option.
3. Infinite Banking. The Infinite Banking Concept is likely the most brilliant financial strategy ever developed. It is a system that can help you reduce your interest and tax expenses significantly while building your cash reserves. It represents a new paradigm in business financing, but please don’t let your lack of knowledge keep you from learning how to handle your business finances in the most optimal way. In fact, if you have somehow gotten stuck in the cycle of invoice factoring, Infinite Banking can help pull you out and get you back to profitability in record time. To learn more about the Infinite Banking Concept, pick up a copy of the book Becoming Your Own Banker by Nelson Nash; you won’t regret it!
Hopefully this has given you some new insights into resolving your cash flow concerns. I encourage you to stat by looking at some simple ways to cut costs. In fact it might be fun to engage your staff for input and see what kinds of suggestions they have.