Tips every small business owner needs to know to plan for success.
For a small business, day-to-day cashflow is crucial. Paying your bills and paying your people requires having enough money at the right times—and thankfully, there are tips and tools out there which can help business owners manage their incomings and outgoings for smoother and stress-free finances.
The Australian Bureau of Statistics reported significant retail sales recovery for the beginning of 2022. Research by Fitch Solutions noted the same, with an additional note that online retail spending has remained high despite the end of most lockdown measures. That’s good news for anyone bootstrapping their small online business—but a solid business plan that protects cashflow is always necessary for long-term success.
We’re here to help small business owners grow, so we’ve put together some helpful tips for any small businesses looking to ride the wave of increased sales and make 2022 a good year, cashflow-wise.
Create a buffer
Perhaps the best way to ensure smooth cashflow is to have enough cash on hand to last at least three months’ worth of expenses. That includes your materials, wages or salaries for your staff, overheads, office expenses, and any other outgoings.
Having that cash buffer is the best way to protect against coming up short on any given month—but we know it can be difficult to achieve for small businesses. Building up some savings is a great goal to work towards as your business becomes established.
Change the dates
Sometimes, cashflow issues are simply about timing—money goes out before it comes in each month. If you have not yet built up a decent buffer, this can put you in a tricky situation financially.
Before looking into borrowing, try adjusting payment dates with your suppliers and service providers. If you can renegotiate the deadlines, you may be able to better align your incomings and outgoings to smooth out any bumps in the road.
Forecast your cashflow
You know what they say: fail to plan, plan to fail. A cashflow forecast, created by charting and projecting your expenses, allows you to make informed decisions as your business grows and changes.
With all the information at hand, you can decide which cashflow tools will serve you best, how to schedule payments, invoice due dates, and more. Knowledge is power. If you know where the pitfalls are, you can do your best to steer around them.
Take advantage of Zip Pay
Zip is a finance provider offering payment tools that will help both you and your customers with cashflow issues.
Zip Pay allows you to offer a “buy now, pay later” option to your customers both online and in store. The platform can be integrated into your website in just ten minutes and will encourage sales by making it easier for people to purchase in the moment and while they are thinking about it.
The platform also recently announced a new and unique “buy now pay later” product for small businesses which extends the benefits they offer individual consumers to SMEs. Zip Business’ General Manager Geof Alexander says:
“If you have an outstanding invoice that you need to pay, for example, you can forward that to us and we’ll pay that on your behalf and give you an extended [payment option]... It takes the benefits of our consumer product, and expands them out to hit on what is actually needed for businesses right now.”
Zip is always interest free, making it an ideal option for small businesses to troubleshoot cashflow issues and navigate growing pains. Ready to stock up on some standout packaging for your products? We offer Zip Pay on all purchases so you can master your cashflow. Shop our collection.
Clear the path to payment
If you’re using invoices rather than receiving point-of-sale payments, you want to make it as easy as possible for your customers to pay on time or even early. You might consider using an online payment portal or even offering a small discount for early payment.
Ensure that you have all of the necessary information on the invoice, from payment instructions to a clear breakdown of what’s being charged to head off any questions and concerns your customers might have.
Get a grant
A small business grant can give you the headstart you need. Extra funds can give you the buffer mentioned above and allow your small business to grow without cashflow concerns.
Take a look at this business grant finder by Business Australia, available to all those who join for free. This helpful tool allows you to discover what’s available and filter to find the grants relevant to your business. It even offers tips for the application process to boost your chances of success.
Bootstrapping your small business is hard work but a key skill to develop early on. The early years of business are the crucial foundation for business owner, and healthy cashflow can make a huge difference.
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Not sure how to get started with packaging your products? Read our tips in Getting Started: A Guide to Standout eCommerce Packaging.