It’s a scenario many businesses know all too well.
The bills are stacking up, rent is almost due and you have to pay your staff on Friday. You’ve earnt the cash to cover all of this, you reassure yourself, but you just haven’t received it yet.
Cash flow is a major problem for many UK businesses. Fear no more though, Part 1 of this two part series will give you 4 quick fixes for your immediate cash flow problems.
In part 2 we’ll look at the top tips for solving your cash flow solutions in the long term.
Strapped for cash just this once? We recognize cash flow isn’t a constant problem for some businesses – so all you might need is a quick fix for your problem.
Here’s 4 of the best to get you going;
It’s an oldie but a goodie. Get a credit card and pay your suppliers and other bills outstanding - if you know you can pay off the debt quickly then you are unlikely to incur a large expense. If, on the other hand, you would like to pay off the debt steadily over a longer period of time then the structured repayments of a bank loan may be more appropriate.
Beware: Make sure you don’t miss payments to rid you of this debt - you are likely to pay through the ears if you forget minimum payments on your credit card or can’t make repayments on your loan.
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Often a very effective way to release cash quickly from your invoices. Offer your customers a kickback, perhaps a discount on the overall payment owing, in return for payment within 7 days.
Beware: You don’t want your customers constantly holding back on payments hoping they will receive a discount.
Probably the cheapest way to solve your short term cash flow problems. Whilst you will miss out on interest being accrued on your savings, in most cases the loss of interest is likely to amount to less than the fees you will be paying with other short term solutions like a credit card.
Beware: plans for your Caribbean Cruise holiday may take a hit if you never get around to replacing those funds in your savings account.
There are many willing people out there who will give you cash in return for an equity stake in your company – just take a look at BBC’s Dragon’s Den.
Make sure you have all of your facts in order when you go hunting for an investor for your business – the strength of your ‘pitch’ will have a massive impact on whether or not you get your cash and how much equity the investor demands.
Beware: Don’t undervalue the worth of your business. In the early days of the Body Shop, Anita Roddick sold a hefty stake of her company to an investor for less than £10,000. Guess who’s smiling now?
Are your cash flow problems too serious for these ‘quick fix’ solutions? Make sure you tune in for Part 2 next week and we’ll tell you how to mend the hole in the cash flow bucket for good!