Having a small business of your own is a great thing. You get to work the hours you want, take holidays when you want, and answer to pretty much no-one. But it also means that you need to regulate your own cash flow and make sure you have enough money to live the life you want.
Sometimes it can be hard to get paid, which in turn affects your own output of money. This is a common ailment for many small businesses and can be helped with a few small steps:
How you can inject your cash flow
- Get clients to pay straight away – try and offer your clients an option to pay you right away. Many people don’t carry cash these days so purchasing a portable EFT machine from the bank can be a great investment. It means you’ll get money straight away and won’t be left chasing the money.
- Invoice fast – This is a pretty obvious one, but procrastination can get the better of us sometimes. The faster you send those invoices the faster your clients due date comes around. It can help to carry around an iPad and set up mobile invoicing through a cloud accounting system to help you do this.
- Charge more – Okay, we’re not saying a huge surge in price, but do watch out for what your competitors are charging. If you haven’t increased prices in a while, it might be time to do so.
- Go steady – Business is picking up and you want to expand fast. However don’t get trapped by the excitement too soon. It pays to think about where the money is going and what you’ll need in future. Don’t splurge on that bigger office or order too much extra equipment without crunching the numbers first.
- Get help – Bookkeepers and accountants can help sort your finances out. Especially if they are experienced with small business or tradies. They can help you get organised and give you tips on cash flow and prioritising.
- Stay regular – Try to give yourself a reasonable wage regularly rather than injecting chunks of cash into your bank account. Use direct debit where you can with bills, and track what is paid regularly. It will give you a better idea of where you are sitting financially.
- Save where you can – Take a look at your current bills, subscriptions and policies to see where you can save some money. If a membership isn’t doing it for you anymore, give it the flick, or if you’re no longer using a service then cancel the subscription. Likewise if you haven’t looked at your insurance or updated your broker on new business details in a while – take a second look and see if you can save some money here.
By applying some of these cash flow tips you could see yourself chipping into some great savings and truly having a positive financial impact on your business. Our friends at All Trades Cover offer insurance exclusively to tradies which means they know what insurance package can best suit your business needs. Contact All Trades Cover today at www.alltradescover.com.au or fill in their easy online form.