Cash flow problems are more frequent than you might think. For small businesses, cash flow fluctuations can prevent growth. Admittedly, it can be tricky to track your comings and goings at any given time without using specialist software. Therefore, more often than not, issues could result in tracking inaccuracies as you learn how to increase cash flow in your business.
However, many small business owners admit they struggle with payments as clients can fail to pay on time or at all. They are unwilling to confront non-paying clients or stop services for fear of losing them altogether. Yet, the truth is that a non-paying client is a burden to the company. Additionally, if your personal and business finances are intertwined, you might find yourself taking cash out of the company to settle personal invoices.
It goes without saying: Companies need first to address recurring cash flow issues to stabilize their finances. But identifying and resolving cash flow problems are not a guarantee of growth.
Strategies to Increase Your Cash Flow
As a small business, you also need to consider strategies to increase your cash flow permanently. The truth is that a single big purchase order will not fuel growth.
So how can you speed up payments and maximize the volume of transactions in the long term?
Utilize Social Commerce
Approximately 90.2 million people are social buyers in the US, which means they shop within a social media platform. Over a third of users confirm that social media ads influence their purchase decisions. Generation Z buyers prove the appeal of social shopping, as a whopping 75% of them will respond positively to a social media campaign.
Introducing new products or services to social media users can serve a dual purpose. First of all, it develops brand awareness by reaching out to a broader audience.
But, more importantly, shoppers agree that they are more likely to discover new products on social media. As a result, they are more likely to purchase through a social media ad.
As social commerce revenues are expected to reach $3.4 billion in 2028, it would appear like the perfect opportunity to grow your cash flow.
Make Buying Easier for International Shoppers
Global users are not against the idea of purchasing a product from an overseas company. Unfortunately, they often struggle when it comes to payment and delivery.
It can be frustrating for international shoppers to discover that US-based buyers do not need to pay any shipping costs for next-day delivery while they face high costs and a long delay.
Improving your international shipping process and fees can encourage international purchases.
Consequently, it becomes more convenient for overseas customers.
How to Create Your Cash Flow with Payment Incentives
Late payments threaten your cash flow. So, why not reward clients who pay on time? You can offer exciting incentives to encourage early payments, such as a discount or an additional product.
It can also be helpful to implement a late payment fee. Late payments could be charged an extra 1.5% to 2%, encouraging them to settle the bill on time for their next purchase.
Growing your cash flow can free up sufficient financial room to invest in business development. Contrary to common belief, avoiding cash flow mishaps doesn’t guarantee growth. Indeed, the business needs to reach out to new customers and encourage timely payments.
Growing Your Cash Flow
How are you increasing your cash flow for your small business? Has any of these tips helped to grow your business? Please comment below!