There will be times when cash is not coming in through your door and you need to pay your bills. Maybe your customers are paying slowly, or you have fewer customers lined up.
What do you do? Here are some suggestions:
- Seek financing through your vendors. Ask them if you can get another 30 days to pay your bills. Some will agree, and some will not — but it doesn’t hurt to try to get a 30 day free financing.
- Keep on top of your collections
- Check if you can get an overdraft line to your checking account.
- Borrow from a low cost credit card.
The article “How to Manage Home Business Cash Flow Effectively” offers a number of tips as well to help ensure that you have more cash coming into your business than going out:
- Collect money as fast as you can
- Deposit checks fast
- Have a super tight accounts receivable policy
- Disburse your money slowly
- Don’t put too much money in your bank account
- Get an account analysis statement
- Understand that inventory is not cash
- Don’t forget continuity sales
Ensuring adequate cashflow is what will keep your business from suffering the fates of many small businesses that had to close shop.