4. Accept credit card payments. If you don’t accept credit cards, thinking that it’s too expensive, then you’re limiting your business income. Accepting credit cards will increase sales and cash flow by making it easier for customers/clients to pay you. Wells Fargo’s merchant card services allows business to accept payments online, over the phone or in a store/office. Services like Paypal also are making it easier and affordable to accept credit card payments.
5. Diversify streams of revenue. Strive for multiple sources of income. One thing that the financial crisis reveled is that if a company is concentrated in one sector and the bubble burst in that sector it could mean the death of that business. When a company has varying revenue sources it makes it easier for a bank to decide to approve a loan or line of credit.
Now what if your largest customer is continuously stretching you out? Then you have to decide whether or not you can afford to do business with that company, add Coard.
“The reality is that positive cash flow is the heartbeat of any business. If that large client isn’t paying you in a timely manner and you don’t have working capital to sustain the business then you may have to let that customer go,” she explains. If that client represents 50% to 70% of your income you have a problem on your hands. “You can’t afford to keep the doors open with that account not paying you.”
Also consider protecting your cash flow by getting business interruption insurance (aka business income insurance). This way, if you have to close your doors temporarily you are covered for the loss of income. Business income insurance covers losses that result from having to suspend operations or reduce production for a time. It provides compensation to offset lost profits or to pay continuing expenses such as rent and payroll, typically for up to a year for insured losses.
Wells Fargo has a free online small business insight resource center to help entrepreneurs manage every aspect of their business. Visit www.wellsfargobusinessinsights.