Five Ways to Steadily Improve Cash Flow in Your Business!

 

How many profitable companies can you think of that had suffered considerable damage because of cash flow problems?

 

 

 

 

Many businesses are struggling to survive or went bankrupt due to poor financial management – I am sure you can name a few!!

Sometimes, business owners, entrepreneurs and managers neglect the things that really matter – cashflow.

Whenever many people see signs of business success, they often drop the guards down, believing that finance and income streams are secure.

But the harsh reality is that at any given point in time, your business operations can suddenly stop functioning and steer towards a negative outcome.

If you’re thinking of ways to improve and steadily increase your cash flow, take note, and start implementing the strategies below.

1.Perform Accurate Financial Forecasts and Scenario planning

 

 

 

 

There are more business owners than you’d think who are vague about what it takes to grow their business. When entrepreneurs usually think of terms such as scaling or business growth, sometimes many fail to think about all the costs and expenses that are likely to arise and tends to focus mostly on the likely increase in revenue profits.

One way to improve your cash flow is to improve the accuracy of your financial forecasts. But a big mistake is being unrealistic  – you want to be an optimistic pessimist.

By this, I mean you should create multiple realistic and possible scenarios that could occur. Usually, entrepreneurs tend to be overly optimistic when calculating all the potential outcomes. However, it would be best if you were ruthless about the possible results – good and bad.

Analyse and use past data instead of using a brand-new model. Recorded data and information from the past is far more accurate to base your financial forecasting and assumptions off and tends to more realistic than just guessing.

However, it is also important to take into consideration the latest developments in your industry and whats going on in the economy – up to date information.

Look at the different expenses and see where you have the most control. It’s way easier to measure and calculate the volume of your costs than it is to calculate your revenue growth, so start there.

You forecast also need to be updated using the actual results. Please don’t leave it to catch dust once after you create it, but reassess your methods and practices to see how close you are to what you initially forecasted. Then, adjust those areas in your business frameworks with any new data.

Accurate financial forecasts ultimately lead to better business planning,  financial thinking, and improved decision making that’s more strategic and rewarding for your cash flow.

2.Cut Down on Operating Expenses

Are you keeping an eye on how you can cut down on some of your operating expenses?

Track your financial records and statements and look at where your money is going ( manage the cash outflows as well as the cash inflows). I can bet that there’s at least one service or subscription you’re paying for that isn’t really adding much value to your business.

To stay safe, double-check with an accountant or financial advisor with what you might decide to stop paying for. This prevents any significant repercussions that could harm your business revenue or profits.

3. Practise Early Payments

Not only should you pay early to avoid penalty costs and get overcharged with future suppliers, but you should also promote the concept of getting your customers to not pay you later than when they really should be.

One good way to do this is by using incentives such as discounts, or even by upselling them on special offers if they pay early.

If you haven’t already, take the time to outline or update on your financial plan for your business to reduce cash output.

But, always be on time and don’t miss deadlines. You should also be sending invoices earlier so you can get paid faster. If you’re not already, consider using invoice software so that your customer payments aren’t overdue.

4.Experiment With Different Pricing Strategies

Don’t be afraid to test out different pricing strategies and structures to see which works best.

One way to improve your cash flow is to increase your prices. Most business owners are afraid to do so, but it would only be bad if you miscommunicated or if it’s an unreasonable, drastic change. E.g. increasing your product from £50 to £1000.

One example of a good pricing model is monthly subscriptions. Instead of having a one-time charging price for a high-ticket product, you could change it to a subscription model, which is great for recurring income.

Subscriptions are also effective for customer retention. It also makes your product more affordable and easier to pay for those customers who might not have been able to pay for your product in the first place.

Take the chance to find out how far your audience is willing to go. And don’t forget to seek feedback and reviews when you’re changing the pricing structure of your business.

5. Manage The Different Sections That Influence Your Cash Flow

Often, people believe that making more money will resolve their issues, but that’s far from the truth. The other half of the answer lies behind how you manage your money.

Different sections influence your cash flow, including:

  • Inventory and Stock Control (Product base business)
  • Revenue generation strategies
  • Expenses Management Policy
  • Cost of Goods/ Services Sold
  • Accounts receivable/ Debtors
  • Accounts payable/ Creditors

Sometimes, you’ll find items in your inventory that are slower than some of the other items you already have.

When you’re tracking your metrics, you might also notice that there are certain features or products that a very small percentage or even no customers at all are paying for. If that’s the case, cut that out your inventory – what’s the point of buying more of something that’s not going to make you profit?

Conclusion

It is vital to monitor your cash flow and to pinpoint where the financial gaps are in your business consistently.

Whenever you notice a problem, the right answer may not always be to dispose of the source completely. Instead, it might just need to be looked at a different perspective so you can take on a new approach that works better.

If you’re looking for a proven blueprint to curtail expenses, and maximise your business profits and maintain positive cash flow, grab my free e-book right here.

You can also get in touch if you are looking for proven strategies and techniques to improve your cash flow – Use the link here or email us at admin@racmacs.com.

#finance #money #business #success #entrepreneur

The Power of Positive Thinking and Self Belief

What is Positive Thinking, and how does it bring about success?

You have probably heard about the power of positive thinking and how it can make you successful. Not everybody understands how on earth positive thinking can change situations and bring about positive results. A wise man once said that the most significant accomplishments, the most magnificent ideas and the most exceptional innovations began with one single thought.

An inventor nurtures and develop ideas in their mind, believing it is possible and visualising it before working on it physically, and then seeing come to fruition. Hence, the reason positive thinking is such an influential and crucial recipe for success, or the accomplishment of ideas, tasks and even long-term visions.

Positive thinking is seeing things from a positive perspective, regardless of the challenges involved. The obstacles do not disappear because you have a positive mindset. The positive mindset helps you see a way around the barriers and believe in the accomplishment of the plan or task.

A positive mind enables you to gain self-belief. When you believe in yourself, you gain confidence and self-esteem. You look at the glass as half full and not as half empty, as the saying goes.

One of the best books ever written is “As A Man Thinketh” by James Allen – it is only 63 pages. Every human being seeking to benefit from positive thinking can benefit from reading this philosophical book!

Positive thinking is a concept whose popularity continues to grow. It is not just a mental attitude but an emotional one, as well. It is a personal choice to focus on and amplify the positive side of things. As a result, scholars have suggested that one’s subconscious mind then leads them to take the right steps towards victory and success.

You may have come across some famous positive thinking quotes. They all reinforce the suggestion that there is power in positive thinking, and it leads to positive results.

Here is a fitting illustration: Suppose two job-seeking friends, Adam and Jack, wake up one morning planning to attend the same interview? Adam is a positive thinker and wakes up with a bright outlook. He feels that he can get this job, and already visualises himself as working at this exciting new company. So, dresses for the interview has a smile on his face and gets there on time. He is psychologically prepared and ready for any questions.

On the other hand, Jack feels that this is just like any interview he had in the past, and the chances of getting the job are slim. He is tired of interviews and looks exhausted, disoriented and annoyed. The least odd question irritates him. Note that the difference between these two is their mindset. After the interview, Adam gets hired. The interviewers like his positive attitude, his confidence, his attire and focus. They do not like Jack’s tired look and his attitude.

In summary, Positive thinking makes people act in a way that leads to positive results.

How to Achieve a Positive Mindset (How to develop a habit of thinking positively)

Many people have written off the concept of gaining success through positive thinking as “motivational politics” without a scientific basis. Nevertheless, a positive attitude is the first step in the walk to victory. Because people with a positive way of seeing things focus on the success that lies ahead and not on the obstacles that discourage the less motivated. Here are ways one can achieve a positive frame of mind and success as a result.

  • Learn to focus on the positive things you encounter. Find things that make you happy or encourage you during the day. There is something about negative words and negative situations that makes the human mind naturally dwell on these things, creating a pattern of worry. You can develop a positive mindset by focusing on the small positive things you encounter. By creating a habit of dwelling on these, you teach your mind to think positively. A positive mind leads you to make more positive decisions, have self-belief and gain confidence – This is a recipe for success. In essence, that is the power of positive thinking.

 

  • Start every day positively. Regardless of what happened the previous day, every day should be a new start. Treat any failures you may have encountered the last day, week or month as though they do not affect the current one. That is because you can always make a fresh start. Do not the past ruin the present.

 

  •  Life is like climbing a ladder. You focus on the current step, but still intend to reach to the top, and are aware of the steps and the ground below you. Dwelling on the past and looking back as you climb up will never help you to reach the top.

 

  • Some people develop a cycle of unhappiness because they keep on repeating mistakes. Learn to learn from your mistakes! Learning from mistakes helps you make better decisions in future and be more successful as a result. Repeated success will help you develop a more positive attitude.

 

  • A friend with a positive mindset can help you gain a similar mindset. Surround yourself with friends who challenge or encourage you to look on the positive side of things. Alternatively, friends who encourage you to visit places that breed positivity or create a positive atmosphere through their positive attitude and conversation.

 

  • Have a plan of action, and start working on it. People who make a plan, write it down and start working towards it generally have a more positive attitude. They have a goal and a purpose, and every day they know they are getting closer to accomplishing that goal. They are more likely to be positive-minded in their everyday endeavours. They also respond better to challenges and obstacles because they know that they are mere distractions and not failures.

 

  • Take some time, say half an hour, every day to remember some positive things. Things that make you happy. Things that you succeeded in doing. Victories. Also take some time to speak some positive words like: “I will do it. I can do it. I am powerful, and I am ready for success. No obstacle will stop me. I will get there.” It may sound crazy, but your subconscious mind begins to repeat these words as you make it a habit. They are not only a morale booster, but you may have heard of the power of positive confession and affirmations because words have the seed of energy in them.

 

  • Write down some positive words and place them where you can see every day, maybe a poster on the wall with positive thinking quotes or positive words in general.

 

  • Find an outlet for negative emotions. If something depresses you, find an activity to focus on, or talk to friends. Bottled up emotions can adversely affect positive thinking.

 

  • Write down a few activities that make you relax mentally and emotionally – This could be a walk, fishing, watching a movie, and so on.

Positive thinking and Self Belief are recipes for success.

Self-belief means that you believe in yourself. In other words, you have confidence in your ability, and in yourself as a person, this has a psychological effect not only on your thoughts but on your actions. Self-confidence takes away doubts.

In a nutshell, several influences and factors affect one’s ability to succeed; however positive thinking plays a significant role in the ability to achieve success.

Past, present and future events play a part in the failures or victories, but it is our attitudes and reaction to these events and thoughts that set us up for success or failure.

All in all, self-belief influences positive thinking and positive thinking has an impact on self-belief. Positive and negative things will always happen to us, but the power to think positively or to believe in ourselves will always depend on how we react to these occurrences. Therefore, purpose to capitalise on the power of positive thinking, and you will be on your way to success in whatever vision or goals you have in your life. Stay positive and Stay focus!