How to Keep Cash on Hand
When it comes to running a business, one of the most important things you need is cash flow. But we all know how tough it can be to keep cash on hand when there are so many expenses needing to be paid. For those tough times, National Business Capital can offer business finance. For now though, here are some tips to manage cash flow:
- Pricing- Know the break even point when pricing your products/services. If you decide to offer a discount to attract new business, be sure you are still making a profit.
- Bundle- Add real or perceived value to your product/service by bundling it with others. Warranties are good examples of this. you get a higher price point up front and your customer gets piece of mind should something go wrong.
- Pre-Sell- Do you offer a product that customers are anxious for? Allow them to purchase the item, or place a deposit, before the item is ready for distribution. This puts some cash in hand and guarantees future sales as well.
- Plan Ahead- Purchase business supplies during your busy season when you’re flush with cash. Many suppliers will offer pre-season discounts to help save even more money.
Set a goal for the amount of cash on hand you should have. A good starting point is 10 – 20 percent of monthly revenue. With this, you should have enough cash on hand to re-invest in the business. If you do find yourself short, give National Business Capital a call to discuss our business finance options.