Tips for Cash Flow of your Small Business

Tips for cash flow of your small business deals with funding to set up and launch your business, as well as ongoing operations.  

Setting up and launching a business is a big endeavor. But that is just the first step. Then you have to set up the operations, marketing, and compliance, and find the correct income-expense balance to sustain a profit for growth. 

Running a business requires a lot of planning, but you also have to get stuff done. In short, this means that you have to envision where you want to get to, how to achieve it, and then consistently apply your time to move the needle forward. 

The types of things you focus on can be broken down into Foundational tasks and Transactional tasks. There are lots of good step-by-step instructions for stage 1 and stage 2 business setup.

Once you’re up and running, you need to finance your growth. Credit can be a blessing, or your downfall — depending on how you use it. We outlined different types of business lines credit here. 

If you’re running a subscription-based or retail-based business, then you’re likely accepting credit cards. There are many types of credit card processing gateways for the cash flow of your small business to choose from. And, there is a specific type of line of credit known as MCA (merchant cash advance).

If used properly, this can provide the daily operating capital you need to sustain operations, and grow. However, it is very important to account for the cost, and build that expense into an operating budget, and add the cost to your selling prices.  

Receiving cash advances initially provides you with a stack of cash, and is easy to account for if you have the correct accounting software. For example, Quickbooks, or Zoho books can be linked into credit card processing systems, such as Stripe, that automatically capture transactions. 

But over time, if not managed correctly credit can put you out of business. So you might want to talk to a business and finance consultant to help you build the proper strategies.

MCA is one of the easier credit lines to obtain because it is not based on your creditworthiness, but rather on your cashflow history. 

It is best used in the early stages while you’re continuing to grow month over month. Later, once you’re stable, you might want to look into a more traditional loan, depending on the nature of your business.

Franklin Merchant Capital provides tips for cash flow of your small business and has loan specialists that can help guide you on finding the right type of funding, and also when it’s time to shift from one type to another. 

Note that if you’re an online eCommerce company (selling services or products), the correct website setup matters too, and then syncing that into your business processes.

If you have the knowledge to know what you need, you can contact a service provider to handle the delivery of your business setup, If not, talk to a business consultant. 

So we discussed financing your business once you’ve launched. But how do you secure the funds to set up the business, before you’re earning income?

There are only two ways to achieve startup funding. If you have stellar personal credit, you may be able to set up a line of credit. If not, you’ll have to source funds from friends and family, or an outside investor.  Friends and family are the most common source of funding: the people know and trust you. 

Sourcing startup funds from outside investors is a much more complicated process. You’ll need to create a one-sheet, a pitch deck (that summarizes the market, the competition, the management, to go to market plan, the use of proceeds, and much more.  A2Z Business Consulting has not only developed these and other necessary documents but also done market research for a host of startup companies.  

CONTACT OUR LOAN SPECIALIST FOR CONSULTATION

Useful Links

Company News, Best Ways Consolidate Business Loans, Working Capital Loans, 5 Tips To Small Business Funding, How To Increase Cash Flow?, Small Business Lending Solutions