Cash flow is one of the most critical aspects of any business. Cash flow is the amount of money that flows into and out of an organization in the form of purchases (or money actually paid) and expenses. Cash flow does not account for invoices that were sent out and were not paid or are in collections. It is a measurement of the way that money is moving through a business — a measurement of its liquid assets.
Even if a business is profitable, poor money management can drive it into the ground.
Strong leaders know that maintaining positive cash flow is essential to business growth. They understand that there needs to be enough money in the bank to cover unexpected costs or reduced sales.
Related: Protecting your business from disaster
Here are five ways to improve your cash flow, fast.
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Increase your prices
If your cost of operations has not increased, raising your prices will have an immediate impact on your bottom line. Just make sure to prep your clients in advance of the changes to avoid sticker shock.
Encourage your employees to upsell and cross sell
Restaurant businesses are great at getting customers to spend more for side dishes, premium drinks and "value meals." Use this inspired tactic at your business, and work with your team to develop special bundles or upgrades for your best customers.
Re-examine your inventory
Conventional wisdom says that for most businesses, 80 percent of their profits come from 20 percent of their products. Take a look at your best and worst sellers, and develop a plan to offload the goods that are tying up capital and not moving.
Try a crowdfunding campaign
If you have a project that you want to start, try a crowdfunding site like Kickstarter and GoFundMe. They allow business to receive money from a wide range of people in a short amount of time.
Related: Turn a Kickstarter campaign into a top-ranking business
Go through your credit card statements
Chances are you’re paying for some service that you don’t even use any more that automatically renews every year.