Some Cash Flow Tips
In the midst of Covid-19 (Corona Virus), we at JDS WebDesign hope everyone is safe, washing their hands frequently, sneezing and coughing on their elbow, and practicing social distancing. Over the next several weeks, we plan on blogging about making your website more business-friendly. We will have some tutorials on our favorite plugins and features, which will make your site more efficient.
Cash Flow or money management does not have to be a problematic concern for most business owners. Cash Flow is very similar to most business technics, you will need to plan, and plan again. So what are some good technics to avoid a lack of cash flow? Cash Flow is not having enough money in your bank to pay for your expenses, work, and/or living.
Budget
Budget is not a bad word. Budget is the roadmap to avoid long-term financial issues. Budgets should include not just income and expenses. Budgets should have a list of all your incomes and expenses. Expenses should be for work (or business) and living (personal). Write them down, and make sure the expenses are critical. Depending on your situation, going to Starbucks daily might not be a good idea, especially if you are not able to pay for some of your basic expenses.
Keep a close eye on your spending. Make sure your income-receiving process is easy to process. Remember, you are in business. If you are not requesting payment for your services, then you are a hobbyist.
Expand Client Base
Outside of working extremely hard for your existing clients, your number two responsibility is to expand your client base. Scaling your business is never a bad thing. Grow your business, by all means necessary. Use social media, job boards, your community, existing clients, cold calling, etc. It is your responsibility to get the word out about your business and how you can solve your target audience’s pain points.
Use free and paid platforms. Organic search engine techniques. Paid search engine platforms. Social Media Platforms. However, remember no platform is a set it and forget it. You have to manage each platform. See which ones are providing potential clients, and which ones are not. You are going to have to check out analytics and see which one brings you opportunities.
Avoid Large Payment Windows
We do not do Net30 financial solutions. Net30 is a financial solution in which you allow your clients 30 days after invoices to make payment. Some clients use Net 60 and Net90, which is an easy way to get into some financial trouble. Especially if your clients are not timely with their responsibilities. Avoid large payment windows. Make sure you have a set policy. Bill on a certain date, and put a due date. Send reminders to your clients and place late payment fees in your invoices. Remember this is a business, and you are not a hobbyist.
Payment Arrangements
For all our projects, we require a downpayment to start the project. Typically, the downpayment is 50 percent of the total project. And a final payment of the balance of 50 percent is due prior to launch. We tend to avoid three payments and other creative financial proposals. Payment arrangements are deal breakers. Chasing payments from existing clients is a good reason for the lack of cash flow.
Also, make sure you have multi-sources of incomes. Residential income is a great way to eliminate cash flow issues. The more different sources of income the better. This is also going to stretch your organizational skills, as you are going to have to manage all the sources of income. Remember that is just another part of scaling up your business.
Business Loans
Business loans or line of credit is the last thing to use to avoid a lack of cash flow. You can get a great interest rate at most credit unions. Some payment gateways, like PayPal and Stripe offer business loans. If you use these as a payment gateway, then future payments are paid. They will take a larger percentage. This can cause an issue with your budget, as you have to write down a lower amount received. Because you are paying down your loan. But it is an option, just should be your last line of defense.
If you have a web design or application need, then feel free to contact us at info@jdswebdesign.biz or 678-718-5489. Image courtesy of Travis Essinger.
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JDS WebDesign is a Web Design and Brand Marketing Agency located in Marietta, Georgia. We create AWESOME on line presence for Start-ups and Influential People/Organizations. To learn more about us or how we can help you and your organization, you can contact us or schedule a meeting.
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