Three ways to cut costs and generate cash flow

For many SME owners finding the right balance between incoming and outgoing cash flow can be a tricky art to master.

Although poor debt management can contribute to cash flow woes, sometimes resolving the issue is as simple as reviewing your budget and identifying ways to limit the outflows.

Below are some tips to help limit your cash outflows and help confirm a healthy cash flow cycle in the process. 

Review your suppliers

Many businesses often get set in their ways and forget to review areas of the business that can be approved. It's easy to ignore the need to evaluate when everything seems to run smoothly, but it's necessary to run a review as you could identify key areas for that could potentially be improved.

Research your current suppliers and identify if there are any cheaper options on the market. Sometimes you don't even necessarily have to change as research is a great way to kick start negotiations for an improved deal.

Researching your suppliers can be difficult if you don't know where to start. Click here for some tips on what you should look out for.

Manage your costs

Even if you have a budget there is still the likelihood that you could make cutbacks. Review your current expenses and try to identify if there is anything on that list you could do without. Sometimes evaluation can even lead to potential improvement if you determine there is a better way to run the business.

Invest in free marketing

Many startups will allocate a large portion of their funding into initial promotion of their business to try and spread the word about their opening.

Although most startups won't have the necessary budgets to run sophisticated advertising campaigns, even more traditional small business marketing techniques, such as direct mail drops, can become expensive over time. Try kick starting a social media page, managing your own public relations activity or even committing to a joint venture in order to save money.

Cash outflows are a necessary part of business. Whether it is operating costs or expenses allocated to business growth, sometimes it's necessary to spend money in order to make money.

In order to help confirm your cash flow health it's essential that you consistently review and adapt your budget and identify areas where you can limit the unnecessary outflows of your business.  

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