Hey there, fellow entrepreneurs!
Have you ever found yourself in a financial pinch, desperately searching for ways to infuse some much-needed cash into your business? Well, fret not, because we’ve got you covered! In this two-part blog series, I’m going to spill the beans on some tips to help you discover hidden treasures within your own business, without resorting to borrowing, raising prices, or constantly hustling to sell more stuff.
Now, I know what you’re thinking. Uncovering extra cash without taking on debt or increasing prices might sound like a magical unicorn, but fear not, we’re here to demystify the process. Plus, we promise that by the time you’ve finished reading these posts, you’ll be armed with practical strategies to put into action right away.
Let me start by sharing a little story about myself. I’ve spent at least 25 years as a CFO and controller for 9- and 10-figure companies, learning the tricks of the trade to maximize cash flow and supercharge growth. Now I’m bringing those insights to you, giving entrepreneurs the clarity and visibility into cash flow – which is the fuel of every successful venture.
Many entrepreneurs face a common frustration: they’re making money, but their bank accounts don’t reflect it.
“My business is profitable! Where’s my cash?” is a common complaint.
It’s like a mini mystery that needs solving because it leads to delaying decisions that could catapult growth and free up your time. And let me tell you, living with that kind of financial stress is not only bad for business but also for your health, and shows itself in everything you do, from sales calls to client service to employee leadership.
If this sounds like your business, then one of the places that cash is hiding is on your balance sheet.
(Yup! You remember the bookkeeping report you might not ever look at because of all the attention your P&L gets? That one!)
That cash you’re wondering about is there and it’s best hiding place is the line called Accounts Receivable.
Here is the first of two tips on how to find it and extract it:
But first things first, what is accounts receivable?
It is simply the money that your clients owe you at any given time. Or cash you haven’t collected yet for sales you’ve already made.
Think about payment plans that you offer to your customers:
“Pay $5,000 now or two payments of $3,000 over time.” We’ll often make these offers to help our customers spread out their costs.
Guess what – we can accelerate getting that money in. Cash in the door. Now.
Imagine this scenario: you need a cash infusion, and you have several clients on payment plans (Let’s say $500/month for 12 months).
You can launch a marketing strategy that benefits both parties:
“Hey, guys, I am getting ready to make some huge investments in improving our product/service; and to speed things up, we are making a one-time offer to you. Currently your remaining monthly payments (say they have 6 months left to pay) will add up to $3,000. But if you want to pay $2,000 today, I will forgive all the remaining payments, netting you a $1,000 savings”
Now sure, that discount costs you $1,000; but in times of cash crunch, expenses are a little less important than cash-in-the-door.
And there you have it, dear readers, the first installment of our treasure-hunting journey to find cash within your business without borrowing, raising prices, or selling more stuff.
But hold onto your hats because the adventure is far from over! In our next blog post, we’ll continue our exploration by diving deeper into pricing models.
Get ready to unlock the true potential of your business assets, squeezing out every drop of value to boost your cash flow!