How can you unlock the cashflow you didn't know you had?

Businesses don’t go bust because they run out of profit; they go bust because they run out of cash. 

So why do so many business owners struggle to stay on top of this?  

So, where can cash be lurking in your business?  

How can you free it up

Debtors: Take a closer look at your order book – and more specifically at who hasn’t paid you. You should think about your debtors as though you’re a bank. After all, you’re essentially lending them your cash. Like a bank, look to understand your customer profile How to unlock the cash you didn’t know you had (and their ability to repay you) and then monitor for signs of trouble. Don’t be afraid to be ruthless for consistently poor performers – a large order means little if your customer takes 120 days to pay you.

Inventory: When it comes to stock, you should think like a supermarket. Supermarkets are the masters of understanding exactly how much product they have, how quickly it’s selling, how much they paid for it, when it must be sold by and, most importantly, what action is needed to maximise their potential returns. While it can be hard to fight the temptation to hang onto stock on the off-chance that one day someone will buy it, don’t underestimate the power of cash in your pocket.

   

Assets: In other words; office space, warehousing space and equipment. Many businesses find their physical assets can take a chunk of cash, but are you getting the best return from this investment? Smaller businesses could take advantage of shared office space, or think about ways to recoup cash by renting unused space and equipment. If that’s not appropriate for your business, then check whether there’s room to negotiate better deals with your landlord and suppliers.