Managing the early stages of any business has proven to be challenging for most business owners in Singapore. Many find that when it comes to managing cash flow issues, it can be effectively tricky. Thus, the decision to obtain a quick loan can help them stabilise the cash flow of their business.
To ensure that you are able to manage your business in its early stages, here are a few ways new entrepreneurs can stabilise cash flow early and successfully grow their business.
Spend slowly but steadily
When your business is not yet as profitable as you would like it to be, you should not take any financial risks that may jeopardise your business. One way you can increase profitability is by allocating more funds to your business operations. Doing so can also help you to cut down on your debt. Rather than asking for more, you should seek to maximise what you have on the table.
Offering discounts to reliable clients
One way of improving the cash flow of your business is by motivating your customers to make early payments. You can do so by offering discounts to clients or customers who have paid their invoices early. Through that, you can build a long-term relationship with your customers, and further aid you with cash flow problems.
Outsource to cut hiring costs
If you do not have an understanding of how to start your business right, you will find yourself running out of cash early. To prevent this from happening, you should always monitor your cash burn closely. One effective way of cutting down the cost of running your business is by outsourcing non-core functions such as HR, accounting, and finance.
Unlike hiring employees, you will only pay for the services offered when you outsource. Doing so can significantly reduce the total cost structure of your business and help you in your cash flow issues early.
Know your burn rate
Many growing businesses in Singapore are not aware of how much they are losing. Business owners and entrepreneurs should seek to have an intimate knowledge of the financial situation of their businesses. Having an understanding of how much time you have left before running out of cash is also important.
Other factors you should take into consideration of your burn rate is the total cost of sales, marketing, and other administrative expenses.
Let customers pay upfront
When a customer is willing to pay upfront for your product or service, it can help your business through cash flow issues. However, it is important to note that not every customer will pay upfront willingly. You should always take your time to build up a good relationship with your fellow customers.
One way you can do so is by ensuring that the goods are delivered on time. You can also take time out for follow-ups and understand if your customers are satisfied with the services.
As a startup or small business owner, you should never accept the initial price of a product or service offered. Unless the cost of a particular service or product is fixed, there is always room for negotiation in business. You should seek to utilise every chance possible and increase your profits when it comes to negotiations.
The bottom line for the tips above is to ensure that your business never falls into cash flow issues. Apart from the tips above, there are plenty of other ways you can stabilise cash flow such as through a consolidation loan from a licensed moneylender. Not only will all of your debts and loans be consolidated to a single lender, but the repayment fees will also be much lower than the debts combined.
You should always keep yourself prepared through research and financial advice to ensure that your business never suffers from cash flow issues in the future.