20 WAYS TO IMPROVE CASHFLOW
Earn more and get paid quicker
Use the “Improving your profits” worksheet to identify which profit drivers and strategies could have the greatest impact on your sales and profits. Estimate the financial impact of working on these drivers and strategies. Use Success Driver Mapping to evaluate and improve your sales pipeline. Use the SSTW software for further growth ideas. Review debtor collection terms and systems. “Getting paid” insider report and 43 point checklist. “How to get paid on time, in full, every time” BBF seminar and mp3 recording. Consider standing orders and direct debits as an alternative way of collecting cash.
Use less, pay less for it and pay slower
Review payment systems. Ask suppliers for help. Renegotiate payment terms. Negotiate discounts. But don’t be too aggressive, since it may come back to haunt you later. Don’t cut marketing effort – instead switch from expensive traditional marketing to cheaper and often more effective smart marketing. Remember, you can’t cut your way to greatness (ie even in an ideal world costs can only be cut by 100%, whereas income can be increased by much more than 100%). Use the “Improving your profits” worksheet to identify which profit drivers and strategies could have the greatest impact on your costs.
Pay less tax, get back paid tax already paid and get grants and subsidies
Key Improvement Possibilities report on your tax position. Remuneration Tax Planner software. Incorporation Tax Planner software. TaxAbility checklist. Contact Business Link to see what grants etc are available.
Banks, asset finance, factors, other lenders
Renegotiate rates. Explore alternative suppliers of the same kind of finance. Explore new types of finance not currently used. “How to get your bank to say yes” insider report.
Existing investors, new investors
Not generally something to be rushed into. You will usually get a better deal when negotiating with investors when things are going well rather than when you are facing difficulties, since the less successful you are the less they will pay you for the same stake in your business.
6) ASSETS AND INVESTMENTS
Increasing value of assets, increasing return on assets, exploiting “under-used” assets, disposing of assets
Switch to alternatives with higher interest rates, dividends and other income flows. Switch to alternatives that pay income more quickly. Switch to alternatives with higher capital growth so that you can subsequently convert some of the capital into cash. Identify unused assets, hidden assets such as intellectual property, and assets where the value to someone else is higher than their value to you – and explore ways to turn them into cash (such as rental income, licence fees and royalties). Consider which assets to dispose – taking the tax position into account.
You and other family members
Usually this should be regarded as a last resort. It is not sustainable. It is rarely the solution. And it often causes even bigger problems. So exhaust every other possibility first! (Exception: IHT planning for the generation above can often help you to get more cash from the family estate)