Some minor adjustments in your business practices can provide relief from cash flow crises:
- Tighten inventory.
- Bill early and often. Keep a detailed receivables report and act immediately on overdue accounts.
- Don’t expand until you have the cash to support growth.
- Have a cushion to cover a cash flow crunch.
- Stretch out payables. Wait 30 or 60 days and keep the cash on hand. If suppliers want their money more quickly, ask about discounts for early payment.
- Consider raising your prices. Check out what the competition’s doing and make sure your prices or rates aren’t too low.
- Comparison shop. The Internet makes it much easier to compare prices for everything from airplane tickets to office supplies to computers. Start using the Web to get the best deals.