Subscribe to Blog ContentManaging cash flow is one of the most taxing jobs of running a company. This has never been truer today especially with rising costs. A business owner can do a great job in balancing the money deposited in its account, making payroll and paying expenses. Nonetheless, something can turn the business upside on its head and throw the balance out of whack.
This previous post shows you how you can increase cash flow without finding new clients. You can also get more tips from The Globe and Mail, which provides 10 ways to improve cash flow. Some tips include revisiting your employees' cell phone plans and buying used furniture.
Yes, a cell phone investigation can make a big difference. You may have initially selected the best phone plan for your employees, but better plans come along that can save you a bundle. A manager made changes to employee cell phone plans, which led to thousands of dollars in savings.
We asked around for ideas on how companies can find more cash flow. Here is what they suggest.
1. Switch servers and apps. A business saved a lot of money by replacing Exchange servers with Google Apps. This article lists web and business tools that startups use most. You can also find apps at Quixey and alternativeTo.
2. Reduce advertising. A past post tells the story of a lawyer whose advertising budget and revenue increased together. The more he earned, the more he put back in advertising and it took up the majority of what he earned. He cut advertising and took on fewer clients, so he could spend more time on their cases. Because of this, his clients loved his services and sent more work his way through referrals.
The advantage of referrals is they don't cost anything as long as you provide the best service possible. Furthermore, advertising tends to target too wide of an audience. Businesses can find better and more targeted avenues for reach their audience.
3. Check the building's lighting. To shave the electricity bill and save energy, one company took out one or two bulbs for every four. You'd think it'd affect employees, but it didn't because the lighting was bright prior to the change. Look into whether lights remain on overnight and into the option of using motion lighting in bathrooms and areas not used often.
4. Get a handle on temperature. Thermostats that are out in the open with unlimited access lead to employees turning them up or down too much. Instead of letting employees fight it out and use too much energy, lock the thermostats and create guidelines for temperature settings.
5. Review inventory. Look for slow moving items and items that you store, but don't use often. The cost of keeping them in inventory can hurt cash flow. Minimize inventory and stocking fees with a "just in time" system.
6. Flip between in-source and outsource. Some clever businesses do both outsource and in-source, but not at the same time. Begin by looking at your expenses on services such as cleaning services. The cost of cleaning services consists mainly of human capital with salaries, benefits and training. Set up a temporary contract with a cleaning company.
When you end the contract, you know how much you spent and can use that information as you hire someone internally. Do that for a while, and then outsource again. This applies to many jobs and industries while lowering overall costs.
What other ways can businesses find more cash? What has worked for you? How did it pay off?
Here are a couple of more I came across:
* Use direct deposit to pay employees. According to Electronic Payments Associations, the average business could save $2k to $7k yearly.
* Limit turnover. Not only for the usual reasons, but also lost sales and production due to work slippage, effect on coworkers and lost customers who valued employee.
Meryl Evans's last blog post... Links: Remembering 9/11 2011 Edition
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