Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
7 Ways to Stabilize Your Cash Flow to Fund Your Small Business
Moneymagpie Team
6th Mar 2024
As any entrepreneur knows, the early stages of starting a business can be exciting yet financially unstable. While your visions and goals will be big, your revenue may stay modest. Maintaining a steady cash flow can be challenging in this phase. However, there are effective strategies to smooth out the ups and downs. Keep reading to discover various approaches to stabilize your cash flow.4
- Build Your Skills
- Cross Sell Additional Products and Services
- Issue Invoices Promptly
- Generate Multiple Streams of Revenues
- Create Passive Income Streams
- Establish Retainer Agreements
1. Build Your Skills
Before we discuss business-specific techniques, you must remember that you can only ace what you have learned, whether through study or experience, in-depth. You must develop the right skills through educating yourself, maybe even pursuing an MBA online. Many business schools now offer flexible MBA programs that can be completed while running a company. Such certifications and degrees provide invaluable knowledge and skills that aid in running a business and ultimately boosting revenue.
2. Cross Sell Additional Products and Services
In cross-selling, you get your existing clients to buy complementary products or services that add extra value to the particular client’s needs. Successful cross-selling results in increased revenue without acquiring new customers.
You can analyze your customer purchase data to understand which complementary products or services they might be interested in and train your staff to time and convey the pitches in an appropriate way. Make sure you market with confidence without coming across as pushy.
3. Issue Invoices Promptly
Issue invoices promptly after completing work or providing services. The sooner you invoice clients, the faster you receive payments, improving the cash flow. Format invoices professionally with clear and concise details: be explicit about the accepted payment methods as well as any late fee policies if payment isn’t received by the deadline. Having well-organized invoices that clients can easily understand and process will get money in the door quicker.
4. Generate Multiple Streams of Revenues
When business is slower, taking on freelance contracts on the side can generate needed income. Numerous platforms allow you to pick short-term projects you have the skills for selectively. Choose freelance gigs that can be completed efficiently within your available time block.
You can also focus on developing additional monetization channels. Create an ebook, templates, or assets to sell directly from your website on an ongoing basis. Build an email list and generate sponsorships or ads on your blog. You can also monetize social media through affiliate marketing commissions. This reduces cash flow volatility. Consistently producing online content across channels attracts an audience that you can monetize over the long term.
5. Create Passive Income Streams
Investing in dividend stocks and real estate funds or becoming an affiliate marketer are ways to generate income without actively working. Profits come in regularly without much ongoing time and input.
With affiliate marketing, getting an initial following on your website or social accounts allows ongoing earnings as readers buy recommended products from which you receive a percentage. Real estate provides steady returns, whereas stocks give a chance at larger gains. Building passive income improves financial stability in the long run.
6. Establish Retainer Agreements
Businesses offering services on an ongoing basis should set up retainer contracts that provide a pre-paid monthly fee for a set amount of work to be delivered. With an established retainer portfolio, income is steadier regardless of business volatility in any given month.
Endnote
Implementing just one or two strategies discussed here should start providing a noticeable cushion. While starting a business comes with inherent risks, remaining optimistic and taking proactive steps can significantly improve your odds of achieving financial stability.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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