Cash flow is an issue that affects all types of businesses – but in particular small businesses and companies in the retail and hospitality sector. These types of businesses have to deal with constant change, from high staff turnover and seasonal sales to rising supplier costs. Local cafes, pub chains and boutiques can face a daily issue with cash flow, which causes problems in all areas of the business.
At Genie Lending we often provide alternative finance to shops and pubs, to improve cash flow and keep them running day to day. Here are some general tips specific to the industry which could help you get a grip on cash flow.
Keep a thorough record of everything you sell every week and every month. Do you have anything leftover which you’re struggling to shift? There’s a fine line between overstocking and ordering too little, and you’ll have to experiment to get it right. Ultimately however, you’ll probably save more money by ordering too less – don’t overstock your store room. This could free up some much needed cash rather than it sitting unwanted in the back!
If you’re not raising enough revenue, it may be time for a price hike. Obviously you don’t want to send your customers elsewhere, so it’s important to keep an eye on the competition and check what similar businesses are charging. Even raising prices by as little as 10p could improve your sales with little inconvenience to your loyal customers.
There’s always a better deal to be had if you take the time to shop around for your goods. Whatever you need to buy for the business, see if you can find it cheaper elsewhere before choosing the most convenient supplier.
Merchant cash advance
If you take card payments, then your business will be eligible for a merchant cash advance, which can free up some of the income from those payments. It’s a type of short term finance which uses debit and credit card receipts as a form of security. The amount you can borrow will depend on your average monthly turnover.
Reduce labour costs
A good place to start when trying to reduce outgoings is with labour costs. Try and cut hours where you can, or work more hours yourself so you don’t need to pay as many staff.
Struggling with your cash flow? Speak to one of our experts today to see how we can help.