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It’s a brand new year, and despite challenges like Omicron, many of you are hopeful for a good one. After nearly two years of the pandemic, it’s about time.
But those two years have taken their toll—customers and revenue haven’t yet fully rebounded. Plus there are new challenges like inflation and supply chain disruptions that hurt your bottom line.
So we wanted to know your cash flow predictions for the new year—if you’re hopeful, hurting, or a little bit of both. Read on to see how biz owners like you are faring and some solutions to help you get the cash you need to succeed.
When we asked you about your cash flow going into the new year, over 2,500 of you weighed in. And the results were…mixed.
Nearly 40% of you are in a great spot, while an equal amount (37%) are just getting by. And another 24% don’t have enough cash to make it three more months.
However, if revenue rebounds the way you think it will, this forecast might look brighter. For example, in our latest Road to Recovery Report, 50% of you anticipate being at pre-COVID levels of revenue within the first three months of 2022.
So what strategies are you using to increase your cash flow? And what other tips can you take with you into the new year to help you grow? Let’s take a look.
Whether you own a construction business or an art gallery, you can find a way to tweak your operating costs to maximize cash flow. And many of you are doing just that, with great results.
Here are some ideas.
Richard B., owner of Southern Traditions Window Fashions in Greenville, SC, shifted his cash flow in a positive direction by making some changes to his accounts receivable. He says:
We improved our cash position by increasing our deposit requirement and managing our accounts receivable. Our improvement in cash flow has enabled us to upgrade equipment and vehicles and hire.
Alise K., owner of Knit Me Sew Me in Canoga Park, CA cut costs by being smart about what—and how—she purchases.
“I'm very careful when I make purchases for the business. I just got a new business credit card that gives me cash back on every purchase. I have another card that I only use for postage, since I get more cash back on that one. I buy almost all of my supplies with coupons and discounts, and I use my resale license,” she says.
Combined with other efforts like social media marketing and networking:
2021 was the best year my business ever had!
With supply costs through the roof, now is the time to look at what products are benefiting your bottom line—and what ones aren’t.
“This was our best year yet, but our supply costs skyrocketed. We are going to focus more on our most profitable areas (knives, scissors, and garden tools) instead of trying to be ‘all things to all people.’” says Mark M. of M & M Sharpening Services LLC in Wichita, KS.
We are going to focus more on our most profitable areas instead of trying to be ‘all things to all people.'
Like Mark M. mentioned, streamlining your accounts receivable—what customers owe you—can greatly improve your cash flow. But if you have a lot of outstanding invoices, it can be a ton of work to chase people down.
Thankfully, you have options like invoice factoring, suggests Les C., owner of Prolighting and Electrical in Canyon Lake, CA. Invoice factoring is a type of business loan where you sell your unpaid customer invoices to a factoring company that then collects payment. Depending on the company, you can be paid anywhere from 60-95% of the invoice value.
Invoice factoring is a lot easier than taking out loans and gives you cheaper overall rates. That’s what I use.
If you’re interested, try a company like Fundbox. They’ll let you control the communication to your customers and also pay you the full invoice amount upfront.
We can’t talk about cash flow without talking about customers. So if you’re looking to keep your current customers coming back for more and find new customers too, give your email marketing strategy a tune-up.
That’s what Carol S. of Imagine Artwear in Alexandria, VA did.
“We ramped up our email marketing considerably beginning in October of 2021 and continued with an average of three per week through the end of December 2021. Our customers responded,” she says.
Want to ramp up your email marketing but aren’t sure where to start? Take a look at these benefits of email marketing and a breakdown of the best email marketing providers, according to biz owners like you.
If you’ve tried these and other strategies and are still coming up short, it’s time to dig into your financing options. But with so many types of loans and loan providers out there, how do you begin?
Try a loan matchmaker so you can compare your options and rates and make the best choice for you. Lendio is a great place to start. You simply put in your business details and loan leeds, and they’ll show you what’s out there, rates, and more.
Easy, right?
No matter where you are in your cash flow, know that you have options. So dig into your finances, adjust as needed, and take advantage of resources. Cheers to a great year!
