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"How To Deal With a Business Cash-Flow Problem"

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Cash flow problems are common in any business, and for various reasons. Recession, downturn, sales not meeting expectations, a major investor backed down, and many other things.

When not handled carefully, cash flow problems can be extremely dangerous for any business. Yet, many entrepreneurs failed to recognize the problem until it's too late. Raising more money might be a solution, but it won't necessarily be the best one.

The following are some tips on what you can do when it comes to financial shortfalls and cash-flow problems. Even on the smallest signs for it, you should remember these few simple tricks:

1. Manage your Outstandings

Are there any overdue debtors and non-interest generating outstandings you can salvage? It can be a very useful source for money in these kinds of dire situations. Check your bookkeeping reports and financial statements thoroughly.

2. Reduce Costs

Sometimes we focused too much on revenue generation and forego the importance of cost efficiency. Negotiate better price on all your suppliers and consider buying in bulk to save long-term.

During the process, you might also be able to negotiate your current outstanding. If you can reduce it, why not?

3. Reduce Waste

This will affect one type of business more than the others, such as restaurants, manufacturing, or many other businesses. However, there will always be a way to reduce the amount of waste you generate. Many strategies are available, and you'll benefit by spending less on disposal as well as increasing your cost efficiency.

4. Manage Your Payables

Arrange a payment plan to your most important suppliers, most likely they are willing to help in your temporary financial situations. They might also be able to provide advice, or give you an even better deal than you asked for.

Negotiate better deals for your electricity, communication, and transportation bills. If possible, you might also challenge them for a consolidation so that all your bills will go through them for a better rate.

5. Asset Disposal

This might seem desperate. However, you might have idle equipment or facilities that can either be reactivated or be disposed of. The sales of these assets might add some liquidity to your business. You might also save money on insurance, maintenance and operational costs, and overheads by getting rid of it.

6. Clean Your Warehouse

There might be old stockpiles unsold, and you can sell it for a discounted price to free some cash. Get your sales and marketing people to work on ideas to get rid of this old stocks as fast as possible without hurting your brand and keeping it aligned with your business values.

In short, find places in your business where you might be able to improve efficiency. There will always be ways to fight the temporary financial setbacks without raising more money from investors.

And sometimes, simply generating more revenue can be the best solutions. Be more creative in your marketing approach, and consider giving better incentives for acquisition of new business. You can extend giving incentives even to your non-sales workforce if necessary, they might give an angle your sales team didn't have access of.