7 Tips for Maintaining a Healthy Cash Flow in 2019

No matter how big a company is or how much revenue it generates, it can fail if it has a cash flow problem. Cash flow is the amount of money flowing in and out of your business during any given time period—and you need to keep an eye on it. It’s critical to have enough money entering your business in time for you to pay your bills and cover other expenses when they’re due.

Cash Flow Statement – A Tool for Monitoring Your Small Business’s Cash Flow

The cash flow statement is a financial report that enables you to see the sources of cash flowing into your business—and how you are using your money—over a specified period of time. Businesses that have enough working capital available at all times to cover their operating costs are said to be “cash flow positive.”

Cash flow statements provide critical insight into the financial health of your business that you cannot alone get from looking at balance sheets and profit and loss statements. For example, if you’re a sole proprietor or single-member LLC owner who takes owner’s draws rather than paychecks from your business, your owner’s draw amounts probably aren’t included in your P&L. However, they do show up as money flowing from your business on cash flow statements.

If you’re using accounting software like QuickBooks, FreshBooks, XERO or another tool, you can easily generate cash flow statements. If not, SCORE has a template you can use to create a 12-month cash flow statement.

Because most businesses receive income and pay bills monthly, it’s beneficial to review cash flow regularly throughout the year.

How to Improve Your Small Business’s Cash Flow

What if you find your monthly cash flow is negative or barely covering costs in time? Below are some ways to improve cash flow.

1. Ask for down payments on projects.

If your business invoices customers on a project basis, ask for a portion of the billable amount upfront. Doing so will help ensure you’re not waiting until project completion for all income. Also, consider billing for any completed work to-date when clients delay an assignment mid-project. The key is to try to have your customers pay you for your goods and services as close as possible to when you provided those goods and services.

2. Send invoices immediately.

Rather than sending all client invoices at the end of the month, consider sending them as soon as you’ve finished your work or provided a product to a customer.

3. Adjust your terms of payment.

Another way to convert sales into cash more quickly is to shorten your net due date on your customer invoices. If your contracts allow it, for example, consider changing from a net 30 to a net 15 due date.

4. Accept payment by credit card or PayPal.

Although these options come with a small transaction fee, they can help you get paid more quickly than waiting for a customer to process a check payment.

5. Offer a discount for paying early.

To incentivize customers to pay quickly, consider offering a small discount. For example, some companies provide a 2 percent discount if an invoice is paid in 10 days.

6. Follow up with customers who have overdue accounts.

Sometimes invoices slip through the cracks and well-meaning customers forget to pay them. A polite reminder may be enough to get that money flowing into your business.

7. Negotiate with vendors and suppliers.

Adjustments on the accounts payable end of things can make a difference in cash flow, too. Consider asking your vendors and suppliers if they’re willing to extend due dates to accommodate your receivables better. They may also be willing to offer your business more favorable pricing if you commit to a longer-term agreement.

“Cash is King,” So Treat Your Cash Flow With Respect

If you need help understanding the financial health of your business, seek the expertise of an accounting professional. Also, contact SCORE; our experienced mentors are here to offer insight and guidance to help your business succeed.

 

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How to get five stars on managing your online reviews

In today’s market, consumers read online reviews before buying products and services whether they’re buying an item on Amazon or scoping out a local small business. You can’t afford to miss out on what people might be saying about your business online.

Online Reviews Wield Word-of-Mouth Power

According to BrightLocal, “Nearly every consumer now conducts regular local searches, placing expectations on businesses to be visible online. Some businesses can struggle to differentiate from their competitors, so a positive online reputation is useful to help customers make a choice.”

BrightLocal’s Local Consumer Review Survey – 2017 found that 85 percent of consumers trust online reviews as much as personal recommendations.”

Online Reviews Help SEO

Online reviews may also help a business get found in online searches. According to the Moz 2018 Local Search Ranking Factors study, review signals are among the top 8 ranking factors used by Google.

The number of reviews, diversity of reviews, and review velocity (the rate at which a product garners new reviews) all have an impact on where on the search engine results pages a business will appear.

Which Review Sites Carry the Most Weight?

The 2018 ReviewTrackers Online Reviews Survey: Statistics and Trends found that Google has become the preferred review site for consumers. “63.6 percent of consumers say they are likely to check online reviews on Google before visiting a business — more than any other review site.”

Facebook is the most popular online space for leaving reviews. Although growth has slowed for sites like Yelp, TripAdvisor, and CitySearch, many people are still using them, and they continue to have an impact on companies’ reputations and ranking in online searches.

A Few Things to Keep In Mind

1. If you haven’t established or claimed your business on Google My Business and other review sites, consider doing so.

On some sites, such as Yelp, customers might be leaving reviews even if a business hasn’t established an account there. Realize that people can and will talk about your business online, so it’s in your best interest to know where that’s happening.

2. Be careful about soliciting reviews from customers.

While Google allows businesses to encourage customers to leave online reviews, some other review sites prohibit it. Some review sites prohibit asking customers to leave reviews. Always check the website’s terms of service to make sure you follow their rules.

3. Make sure that your business information is consistent across review sites.

Use the same company name, address, and phone number (NAP) information across all of them. Many SEO experts say that search engines view consistency in NAP information as a sign that a business is legitimate. If your NAP info differs from one site to the next, people might see incorrect information about your business in search results—or your business might not turn up on the search engine results page at all.

4. Pay attention to when someone leaves reviews.

Stay tuned into notifications when someone leaves a review of your business so you can respond—particularly if it’s a negative review. According to the ReviewTrackers survey, 53.3 percent of people expect a business to respond to a negative review within 7 days. By acknowledging customers’ dissatisfaction and taking action to remedy it, you’ll demonstrate integrity…and those people might be inclined to remove their negative review and write a more favorable one.

If you do get a few negative reviews, don’t fret. It’s likely it won’t permanently damage your reputation. In fact, several critical reviews may even help your business. Reviews, whether positive or negative, increase the overall number of reviews and they may enhance your credibility. Some people might suspect that a company with all glowing reviews is “too good to be true.”

5. Watch out for fake reviews.

Positive and negative fake reviews can do damage to your business’s credibility online. On many sites, anyone (whether a customer or not) can write a review. Some have automated mechanisms in place to detect and remove fake reviews, but their methods aren’t always 100 percent effective. If you find that someone has left a fraudulent review about your business, follow the review site’s process to launch an investigation.

 

6. Monitor your online reputation so you can detect when people are talking about your business.

Besides checking activity directly on the review sites, also consider setting up a Google Alert on your business name to notify you whenever someone has mentioned your business online. The more you know about what people are saying about your business, the better able you’ll be able to understand what you’re doing well and what you might improve. Online reviews and conversations can provide valuable feedback to help your business serve your customers better.

If you have questions or need guidance about managing aspects of your business online (and off), contact SCORE to talk with a mentor.

 

Make “Shop Small” a Big Win for Your Business November 24th

Since American Express launched Small Business Saturday in 2010, it’s mantra “Shop Small” has become the rallying cry to encourage the support of local small businesses in communities across the nation.

According to the Shop Small website, a 2017 survey found that 90 percent of consumers believe Small Business Saturday has a positive impact on their community.

With this year’s Small Business Saturday approaching on November 24, 2018, are you prepared to seize the momentum and boost your business?

Fortunately, there’s still time—even if you haven’t given it much thought yet.

5 Tips for Making Small Business Saturday a Success for Your Business

  1. Make your place of business a Small Business Saturday destination.

Give consumers some extra incentive to stop by your location on Small Business Saturday. Some ideas to make your store or office a Small Business Saturday destination include:

  1. Partner with other local businesses in your community.

When you and the other local businesses in your town support each other by cross-promoting  the diversity of offerings in your business community, everyone wins. Consider sharing other businesses’ marketing materials at your location, and tell customers about the different stores near you—with the understanding, of course, that they’ll do the same for you.

  1. Power up your social media efforts.

Social media is a powerful medium for generating buzz about Small Business Saturday and promoting what you and the rest of your business community have planned for that day. If you’re on Twitter, Instagram, and LinkedIn, use the hashtag #shopsmall in your updates to encourage engagement from other small businesses and people who are actively seeking out to support small businesses on Small Business Saturday. To boost the number of people who see your posts, consider spending some dollars on social media advertising in the weeks leading up to Small Business Saturday. For example, Facebook’s advertising options (ads and promoted posts) can expand your reach significantly—to a very targeted audience—for a very minimal investment.

  1. Use the free marketing templates available on the Shop Small website.

American Express offers free Shop Small and Small Business Saturday templates that you can customize and download for use on your website, email marketing messages, social media, and in your print marketing efforts.

Some examples of what’s available there include:

  • Website badges
  • Email template
  • Email header
  • Shop Small video (10 seconds)
  • Social media profile and cover images
  • Social media post content and images
  • Event flyer
  • Poster
  1. Ask a SCORE mentor for guidance and ideas.

SCORE mentors have experience in all aspects of running a business, and we’re here as a resource to help you formulate your marketing and sales plans. Contact us today as you develop your Small Business Saturday ideas.

 

4 Tools to Help You Write Better Content

Writing content isn’t every entrepreneur’s strong point, but bootstrapping startups don’t always have the funds to hire professional writers or marketing firms to craft content for them.

Fortunately, some online tools are available to help even the most unaccomplished writers among us improve our writing and make a great impression.

4 Writing Apps to Help You Create Better Content

Hubspot’s Blog Ideas Generator

When you’ve hit a wall and can’t think of what to write about, Hubspot’s blog topic generator can help you break through writer’s block. It prompts you to add up to five different nouns of your choice, and then it will generate seven blog topic ideas related to those nouns. While some of them might not be a perfect fit at face value, you can modify them to your liking, or they might help you develop new ideas.

Hemingway Editor

The Hemingway app helps ensure your writing isn’t too complicated and over the heads of most readers. It assesses your content and tells you at which grade level it is readable. Anything above a grade-9 reading level is flagged as less than ideal. Hemingway also alerts you to overuse of adverbs, use of passive voice, and complex phrases and sentences.

Power Thesaurus

If you love the assistance of online thesauruses but get annoyed by the advertisements on their websites, meet Power Thesaurus. For the most part, the app is ad-free (except for some non-intrusive advertisements by premium sponsors). It has a simple, uncluttered interface that suggests synonyms for whatever word you type in its search box. Fast and effective, Power Thesaurus helps you power through finding just the right word more quickly than when using other thesaurus websites.

Grammarly

Grammarly is quickly becoming a tool of choice (for writers and non-writers alike) for fine-tuning writing. Its free version detects critical grammar and spelling errors. Grammarly Premium has enhanced capabilities including offering vocabulary suggestions (if you appear to have used words out of context), flagging complex sentence structure, and evaluating content according to its intended purpose, audience, style, and emotional impact.

Bonus Benefits

Not only can these tools help you fix weaknesses in your content, but also they can help you improve your writing skills over time. As you use them, you have an opportunity to learn to think out of the box, increase your knowledge of grammar rules, and broaden your vocabulary.

Of course, apps can’t do it all! Another resource available to help you assess the content you create for your business is a SCORE mentor. SCORE volunteers have experience and expertise in all aspects of entrepreneurship, including marketing, and they are here to offer honest feedback to help your business succeed.

7 Ways to Control Your Small Business’s Overhead Costs

Whether you’ve just launched a startup or have been in business for years, it’s critical to control your company’s overhead costs. Overhead expenses, the fixed costs (rent, insurance, etc.) of operating your business, have a tremendous impact on your bottom line. How effectively you manage them can mean the difference between profitability and extinction.

It pays to carefully review what you’re spending on overhead and find ways to reduce those costs. Not sure where to start? Consider the following ideas:

7 Tips for Trimming the Fat From Your Small Business’s Overhead Expenses

1. Explore sharing marketing costs with complementary businesses in your local area.

Brainstorm ideas with fellow entrepreneurs about how you can cross-promote each other and get exposure through collective efforts.

For example, a bed and breakfast that serves as a wedding venue, a photographer, and a florist could all save money by splitting the bill and running an ad featuring all three businesses in the local newspaper.

2. Keep a tight rein on travel and entertainment expenses.

Have a clear policy and budget for these expenses. Under some circumstances, it might make sense to hold business meetings that involve treating clients to lunch or dinner, but be judicious in determining when that’s necessary. Wining and dining costs can add up quickly when no guidelines or boundaries are in place.

3. Reduce the need for office space by having a virtual team.

As your business grows and you need to add headcount to your team, consider allowing employees to work remotely. This can help you avoid needing to lease or buy a larger office space, and it will help you reduce the costs of office supplies and utilities, as well.

4. Be selective about the memberships and subscriptions you maintain.

Besides the challenges of finding the time to participate in multiple networking groups and professional organizations, the membership fees can put a strain on your budget. Strategically choose the organizations you join by considering whether they provide ample opportunity to build relationships with your target customers and whether they are necessary for your professional reputation.

For example, the owner of a tour company would likely benefit immensely from a membership to the local visitor bureau whereas professional organizations not focused on the travel and tourism industry might not offer as much return on investment.

5. Pay the annual fee rather than on a monthly basis for cloud-based software.

Even though the lump sum annual cost may sound like a lot of money compared to the monthly fee for online software programs, paying for a year upfront can often save an appreciable amount of dollars over time.

For example, a subscription to Evernote Plus costs $3.99 per month with the month-to-month plan and the equivalent of only $2.92 per month by paying $34.99 for the annual plan—a savings of 27 percent.* Similarly, Hootsuite offers its Professional subscription for $14.99 per month, or you can choose to pay for an annual subscription for $119.88, which is the equivalent of $9.98 per month—a 33 percent savings.*

By switching from month-to-month plans to annual subscriptions for several or all of the software solutions you’re using, you may discover you’ll cut costs considerably.

6. Collaborate by phone and email when it can be just as effective as meeting face-to-face meeting.

With the high price of gasoline, it makes good economic sense to reduce how much you drive. While some business dealings require face-to-face interaction, many collaborative efforts can be accomplished through a phone call or email. When appropriate, suggest that you talk with customers and project partners via phone or exchange information through email. You might find that they, too, would rather converse that way. Not only does cutting back on driving decrease your mileage costs, but it also saves valuable time and wear and tear on your vehicle.

7. Leverage rewards programs.

Take advantage of free rewards programs that retailers, your credit card, airlines, and other businesses offer. From office supplies to business furnishings to discounted airfare to cash back, these programs enable you to get exclusive deals, rebates, and other incentives that can save your business money.

Where to Turn for More Tips on Running a Profitable Business

For more insight into how to manage your business’s overhead costs, contact a SCORE mentor for guidance. With experience in all aspects of starting and running a small business, our mentors can help you objectively review your spending and brainstorm ways to run a more profitable company.

*According to the company’s website on 8/30/2018