Operating a business efficiently is not an easy task for any individual. You need to ensure there is a proper flow of cash into organization at all times. This is just as important as earning adequate profits from your market operations. However, many young entrepreneurs seem to overlook this fact. As a result, they find themselves facing a cash crunch. This is not the type of situation you want to find yourself in. It can hamper the growth prospects of your establishments in the long-run. This is reason why you need take necessary measures to improve your organization’s cashflow position.
Peter Zieve – How to improve your cashflow position?
Dr. Peter B. Zieve is the Chief Executive Officer and founder of Electroimpact, Inc. This is one of the most prominent engineering companies in America. Since its inception in 1986, the growth of this corporate establishment in the market has been impressive. No one could expect such an achievement. In fact, many industry experts say it has set the bar for other similar organizations to follow. Its products are also the first choice among the public. No wonder young graduates go the extra mile to get the opportunity to work for this company. They feel it can give a boost to their careers. Dr. Zieve is also currently playing an active role in local politics as way to improve the lives of others in Seattle city. This is his way of making a positive contribution to the community.
Peter Zieve says cashflow is the essential lifeline of any business organization. Without money entrepreneurs can find it difficult incur important expenses, pay their employees and suppliers. You will find yourself in a similar situation if your business doesn’t have enough cash. This is the reason why you need to implement the following 4 important measures:
- Take a good look at their payment policy
You receive money from your customers for the sales your business successfully makes in the market. This is why you need to ensure the time it takes for them to pay their dues is short. This means improving your invoicing systems. You should also be open to various modes of payments for the convenience of your clients. You could offer them attractive discounts to ensure they make prompt payments.
- Negotiate better terms with your suppliers
You should sit across the negotiation table with your vendors. Try to convince them to extend your payment period to 90 days if possible. This can go a long way in easing the pressure on your cashflow position. Ask them if they are willing to offer your discounts for making bulk purchases or your dues on time.
- Managing your inventory
Entrepreneurs may not realize that they may holding slow-selling stock items in their organizations. This is why they are incurring huge expenses on insurance, storage and carrying such inventory. You shouldn’t be doing the same thing. If you do have such products, you should sell them offer as soon as possible. You could do this by offering your clients attractive discounts for buying such goods.
- Monitor overheads
This is another important task you need to do. You need to keep your business costs within acceptable levels. This ensure money does not flow out of your organization unnecessarily.
Many businesses become bankrupt because their owners are not prudent with cash. Peter Zieve says in the process they ruin their reputation in the market. You don’t want to do this. Implementing the above 4 measures ensures this does not happen.