hi I’m Evan Carmichael welcome to the
edition of ask Evan today I’m working
with Intuit again and we’re gonna be
continuing our financial literacy series
to help you better understand your
numbers and to be able to make important
business decisions from them so today
I’m going to be looking at how can you
quickly get cash flow into your business
so we’re gonna look at fifteen different
ways that you can improve your
short-term cash flow I know for a lot of
entrepreneurs you might be facing the
serious cash crunch right now and so
here are 15 ways that you can inject
some immediate money into your business
number one have a sale one of the
fastest ways to bring in immediate cash
flow is to have a sale have it for a
limited time only so people are forced
to buy now or they’ll miss out make sure
however that you don’t mortgage your
future just to bring in some quick money
although you’re giving a price discount
it should still be profitable for you
but you’re gonna run into even bigger
problems down the road
number two cross-sell and upsell the
easiest people to sell to are your
current customers they know you like you
trust you and love working with you
instead of spending so much time finding
new clients selling more to people who
have already bought from you is a fast
way to improve your cash flow you can
either sell greater quantities of your
current offering for example buy two of
my hats instead of one or some related
products and services to complement your
offering for example buy one hat and
also buy a pair of gloves a simple email
or phone campaign the current customers
with a hook should have your cash
registers ringing in no time number
three look at your accounts receivable
here’s a sample collections report from
QuickBooks Online it’ll tell you who
owes you money how much and when they
were supposed to pay in this example the
company’s owed almost $9,000 and the
invoices are 38 to 106 days overdue it’s
time to start calling on these companies
more aggressively to make sure they paid
their bills you want to maintain a good
relationship with your clients but
you’re also running a business not a
charity and bills need to get paid for
future clients you may also want to run
a credit check on them before you extend
any
kind of terms to them number four give
an incentive to pay early some clients
might have a policy of only paying after
60 90 or even 120 days the bigger the
client is generally the more you have to
wait to get paid one way to flip this
around is to offer an incentive to pay
early depending on what your margins are
and how badly you need the money you can
give a discount say two to five percent
of the invoice if they pay right away
instead of waiting some customers will
take you up on it because it also helps
them and it puts money into your pocket
immediately number five make sure you
invoice on time a lot of entrepreneurs
are so busy running their businesses and
trying to get new customers but they put
off administrative tasks like invoicing
the longer you wait to invoice the
longer you wait to get paid as soon as
you’re able to annoys your clients you
can get the money as quickly as possible
number six change your billing structure
try as much as possible to get the money
up front and deliver the products or
services afterwards for example when I
work with clients I use a retainer
system they hire me for project which
may include work for up to six months or
a year I’ll build them up front for the
entire project and then deliver
according to the schedule we set up if
you’re selling a product think about
offering some kind of subscription model
where they pay in advance for a year and
they get a certain quantity every month
you can consider offering a slight
discount in exchange for them making a
long-term commitment to you and for
paying upfront
number seven accept credit cards share
their credit card fees they have to pay
but there are also some major advantages
to accepting credit cards as a payment
option the first is that you get the
money quickly either instantly or by the
end of the day customers are also more
likely to spend more money when they pay
by credit card compared the one they pay
by cash you might be saving a little bit
by not using credit cards but you’re
also probably leaving a lot of money on
the table
number eight factor your receivables if
you have significant money owed to you
it’s possible to sell the receivables to
a factoring company they’ll give you a
percentage of the total amount and
return for you getting immediate cash
typically the larger your clients are
the greater percentage you’ll get
because it’s less risks for them to take
on factoring generally is still
expensive and only recommend using it as
a last resort
number nine sell excess inventory if you
have inventory that is just taking up
space try to sell a lot for a quick cash
injection you may not turn a large
profit on it but if it’s not being used
then the best value you may get from it
is to trade it for media cash note that
I wouldn’t recommend doing this for
inventory that you’re going to use in
your business selling inventory that you
will eventually need as steeply
discounted price will have a long-term
negative impact on your business
number 10 negotiate terms with your
suppliers this in theory is a good idea
and the textbooks will tell you to do it
the idea here is to look at everyone who
you owe money to so your suppliers and
try to delay your payment to them for as
long as possible it makes sense because
if you’re delaying when money goes out
you’re improving your short-term cash
flow here’s what I don’t like the
strategy
it can sour your relationship with your
supplier you want to count on your
suppliers for quality products and
services if you’re in a bind they need
something quickly you want to know that
your suppliers have your back you think
they’re gonna give you their very best
and bend over backwards for you if
you’re stretching them out on when you
pay them think about it if they’re a
small business owner then they likely
have cashflow concerns as well and are
looking at their accounts receivable ie
you for some relief if it’s a big
company then get the best terms that you
can but it’s a small company I’d be very
hesitant in negotiating terms in my
business I pay my suppliers as soon as
the invoice me I pay ahead of when
they’re expecting with no discount
because I want the best from them and I
get it
number eleven create a referral program
another great way to boost cash flow
through sales is to ask for referrals
from your existing clients again they
like you know you trust you enjoy
working with you maybe they know someone
else who could also benefit from what
you do you could create an elaborate
program with incentives or just call up
your best customers to take about the
lunch to ask for their help in thinking
of other people who might be a client
for you really depends on the customer
some love the recognition and others
just do it because you ask them to
either way getting new clients in the
door is a great way to improve both the
short term and long term cash flow of
your business and referrals on one of
the best ways to get ideal clients
onboard number twelve refinance short
term into long term debt the people you
owe money to they want to get paid back
and for that to happen you still have to
be in business talk to your lenders and
see if is a way to negotiate a better
deal in particular you’re looking for
ways to move the short term debt which
is money that’s owed within the next
year and convert it into long-term debt
money that’s owed beyond one year this
will give you some cash flow relief that
you can hopefully use to continue
growing your business number thirteen
sell and leaseback
another creative way to improve your
cash flow is to look at your fixed
assets and see if there’s anything you
can sell and then lease back to the
business this works particularly well
with expensive assets like land and
buildings the idea is to sell your asset
to a company which gives you immediate
money but then you create a lease
agreement where you pay an ongoing fee
for the right to use the asset it will
increase your regular payments out but
gives you a monetary injection that you
can help use to solve an immediate cash
crunch no you can only do this once
number fourteen convert debt to equity
this is an even more creative option and
one you should really only use if you
have a good relationship with the people
you owe money to the idea here is to
take the people you need to pay and swap
the amount you owe them for equity in
your business you give them a piece of
your company and they erase the debt you
have to figure out how much you think
your company is worth as well as how
much you’re going to give up to them
more importantly you’ll want to really
ask yourself if you want this person to
be a part of your business long term or
not because the last thing you need is a
minority shareholder who adds no value
and causes problems for the company it’s
not my favorite option but it’s an
option so I wanted to share it with you
number fifteen bootstrap this is my top
suggestion of all I hate spending money
until I’m making money anybody can spend
money but it takes a lot of effort to
learn how to make it if you have a goal
to accomplish something and you think
you need X amount of dollars to do it
find a way to start smaller and without
spending any money prove to yourself
that you can make a little bit of money
just by putting in your time then when
you know how to make money you can spend
money to expend it’s good money to
invest because you know it’s gonna work
you’re just expanding on what you’ve
already shown is effective it’s hard
work it takes a lot more time but will
help ensure that you’re building your
business the right way
don’t spend until you earn thank you for
joining me for another edition of ask
Evan I hope you liked the video if you
did and you want to see more please give
it a thumbs up below it makes me want to
do more of these for you and I’d love to
hear you have to think if you have a
question about this video or you have a
question about your own business I’d
love to hear it if you want to leave it
in the comment section below so thank
you and we’ll see you on the next
episode
you
edition of ask Evan today I’m working
with Intuit again and we’re gonna be
continuing our financial literacy series
to help you better understand your
numbers and to be able to make important
business decisions from them so today
I’m going to be looking at how can you
quickly get cash flow into your business
so we’re gonna look at fifteen different
ways that you can improve your
short-term cash flow I know for a lot of
entrepreneurs you might be facing the
serious cash crunch right now and so
here are 15 ways that you can inject
some immediate money into your business
number one have a sale one of the
fastest ways to bring in immediate cash
flow is to have a sale have it for a
limited time only so people are forced
to buy now or they’ll miss out make sure
however that you don’t mortgage your
future just to bring in some quick money
although you’re giving a price discount
it should still be profitable for you
but you’re gonna run into even bigger
problems down the road
number two cross-sell and upsell the
easiest people to sell to are your
current customers they know you like you
trust you and love working with you
instead of spending so much time finding
new clients selling more to people who
have already bought from you is a fast
way to improve your cash flow you can
either sell greater quantities of your
current offering for example buy two of
my hats instead of one or some related
products and services to complement your
offering for example buy one hat and
also buy a pair of gloves a simple email
or phone campaign the current customers
with a hook should have your cash
registers ringing in no time number
three look at your accounts receivable
here’s a sample collections report from
QuickBooks Online it’ll tell you who
owes you money how much and when they
were supposed to pay in this example the
company’s owed almost $9,000 and the
invoices are 38 to 106 days overdue it’s
time to start calling on these companies
more aggressively to make sure they paid
their bills you want to maintain a good
relationship with your clients but
you’re also running a business not a
charity and bills need to get paid for
future clients you may also want to run
a credit check on them before you extend
any
kind of terms to them number four give
an incentive to pay early some clients
might have a policy of only paying after
60 90 or even 120 days the bigger the
client is generally the more you have to
wait to get paid one way to flip this
around is to offer an incentive to pay
early depending on what your margins are
and how badly you need the money you can
give a discount say two to five percent
of the invoice if they pay right away
instead of waiting some customers will
take you up on it because it also helps
them and it puts money into your pocket
immediately number five make sure you
invoice on time a lot of entrepreneurs
are so busy running their businesses and
trying to get new customers but they put
off administrative tasks like invoicing
the longer you wait to invoice the
longer you wait to get paid as soon as
you’re able to annoys your clients you
can get the money as quickly as possible
number six change your billing structure
try as much as possible to get the money
up front and deliver the products or
services afterwards for example when I
work with clients I use a retainer
system they hire me for project which
may include work for up to six months or
a year I’ll build them up front for the
entire project and then deliver
according to the schedule we set up if
you’re selling a product think about
offering some kind of subscription model
where they pay in advance for a year and
they get a certain quantity every month
you can consider offering a slight
discount in exchange for them making a
long-term commitment to you and for
paying upfront
number seven accept credit cards share
their credit card fees they have to pay
but there are also some major advantages
to accepting credit cards as a payment
option the first is that you get the
money quickly either instantly or by the
end of the day customers are also more
likely to spend more money when they pay
by credit card compared the one they pay
by cash you might be saving a little bit
by not using credit cards but you’re
also probably leaving a lot of money on
the table
number eight factor your receivables if
you have significant money owed to you
it’s possible to sell the receivables to
a factoring company they’ll give you a
percentage of the total amount and
return for you getting immediate cash
typically the larger your clients are
the greater percentage you’ll get
because it’s less risks for them to take
on factoring generally is still
expensive and only recommend using it as
a last resort
number nine sell excess inventory if you
have inventory that is just taking up
space try to sell a lot for a quick cash
injection you may not turn a large
profit on it but if it’s not being used
then the best value you may get from it
is to trade it for media cash note that
I wouldn’t recommend doing this for
inventory that you’re going to use in
your business selling inventory that you
will eventually need as steeply
discounted price will have a long-term
negative impact on your business
number 10 negotiate terms with your
suppliers this in theory is a good idea
and the textbooks will tell you to do it
the idea here is to look at everyone who
you owe money to so your suppliers and
try to delay your payment to them for as
long as possible it makes sense because
if you’re delaying when money goes out
you’re improving your short-term cash
flow here’s what I don’t like the
strategy
it can sour your relationship with your
supplier you want to count on your
suppliers for quality products and
services if you’re in a bind they need
something quickly you want to know that
your suppliers have your back you think
they’re gonna give you their very best
and bend over backwards for you if
you’re stretching them out on when you
pay them think about it if they’re a
small business owner then they likely
have cashflow concerns as well and are
looking at their accounts receivable ie
you for some relief if it’s a big
company then get the best terms that you
can but it’s a small company I’d be very
hesitant in negotiating terms in my
business I pay my suppliers as soon as
the invoice me I pay ahead of when
they’re expecting with no discount
because I want the best from them and I
get it
number eleven create a referral program
another great way to boost cash flow
through sales is to ask for referrals
from your existing clients again they
like you know you trust you enjoy
working with you maybe they know someone
else who could also benefit from what
you do you could create an elaborate
program with incentives or just call up
your best customers to take about the
lunch to ask for their help in thinking
of other people who might be a client
for you really depends on the customer
some love the recognition and others
just do it because you ask them to
either way getting new clients in the
door is a great way to improve both the
short term and long term cash flow of
your business and referrals on one of
the best ways to get ideal clients
onboard number twelve refinance short
term into long term debt the people you
owe money to they want to get paid back
and for that to happen you still have to
be in business talk to your lenders and
see if is a way to negotiate a better
deal in particular you’re looking for
ways to move the short term debt which
is money that’s owed within the next
year and convert it into long-term debt
money that’s owed beyond one year this
will give you some cash flow relief that
you can hopefully use to continue
growing your business number thirteen
sell and leaseback
another creative way to improve your
cash flow is to look at your fixed
assets and see if there’s anything you
can sell and then lease back to the
business this works particularly well
with expensive assets like land and
buildings the idea is to sell your asset
to a company which gives you immediate
money but then you create a lease
agreement where you pay an ongoing fee
for the right to use the asset it will
increase your regular payments out but
gives you a monetary injection that you
can help use to solve an immediate cash
crunch no you can only do this once
number fourteen convert debt to equity
this is an even more creative option and
one you should really only use if you
have a good relationship with the people
you owe money to the idea here is to
take the people you need to pay and swap
the amount you owe them for equity in
your business you give them a piece of
your company and they erase the debt you
have to figure out how much you think
your company is worth as well as how
much you’re going to give up to them
more importantly you’ll want to really
ask yourself if you want this person to
be a part of your business long term or
not because the last thing you need is a
minority shareholder who adds no value
and causes problems for the company it’s
not my favorite option but it’s an
option so I wanted to share it with you
number fifteen bootstrap this is my top
suggestion of all I hate spending money
until I’m making money anybody can spend
money but it takes a lot of effort to
learn how to make it if you have a goal
to accomplish something and you think
you need X amount of dollars to do it
find a way to start smaller and without
spending any money prove to yourself
that you can make a little bit of money
just by putting in your time then when
you know how to make money you can spend
money to expend it’s good money to
invest because you know it’s gonna work
you’re just expanding on what you’ve
already shown is effective it’s hard
work it takes a lot more time but will
help ensure that you’re building your
business the right way
don’t spend until you earn thank you for
joining me for another edition of ask
Evan I hope you liked the video if you
did and you want to see more please give
it a thumbs up below it makes me want to
do more of these for you and I’d love to
hear you have to think if you have a
question about this video or you have a
question about your own business I’d
love to hear it if you want to leave it
in the comment section below so thank
you and we’ll see you on the next
episode
you
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