A company is only as good as its profit; no amount of passion will keep a startup afloat, so you need to find ways to get finances flowing into your business if you want to extend its lifeline. Given the fact most new companies go under within the first five years, the steps you take now can very well make or break your entire business’s future. To help you get some more finances easily, this guide will cover how you can inject more cash flow into your company. From boosting sales to running promotions, these ideas are designed to be flexible so any company can adopt them into their financial strategy.
Look for Grants
Business grants can give your company several thousand dollars that you need to stay in operation. Look for different opportunities online, like job creation grants or state grants for local businesses. The Small Business Association (SBA) has several programs available to assist local eligible establishments. From COVID-19 relief to research and development, there are plenty of options for you to explore. Don’t assume that because your startup is young it won’t qualify for any funding. There are many organizations that extend money to new companies. You have nothing to lose by applying.
Free Up Space in Your Personal Finances
Your budget might seem fixed, but there are ways to move funds around and save more to put toward your startup. Take debt, for example. If you’re just paying the minimum balance on your credit cards and loans each month, you are likely putting yourself in a tough position that will have you trapped in repayments for years. To make it easier to not only get ahead but also save more, look into your refinancing options.
You can refinance virtually any type of loan, even student loans. By refinancing, you can turn your debt over to a private lender and lower your monthly payments without falling behind. Extending the term of some loans is actually more beneficial because you save more over time and ultimately pay less interest. You can also start to integrate some practical money-saving practices into your life like eating out less, buying groceries in bulk and cancelling costly subscription packages you don’t really use.
Hire a Factoring Service
One of the most popular ways for small startups to get quick cash is through invoice factoring. This process is similar to taking out a line of credit, but instead of working with a bank, you’re working with a factoring company. The company then utilizes all of your receivables as assets, which means you get paid for them upfront and have access to immediate cash rather than waiting for customers to pay you.
Factoring requires you to submit copies of your outstanding invoices to the company, which they will verify and, if approved, provide compensation for. Typically, you receive around 90 percent of the total invoice amount within a day of submitting the invoice. When your customers do pay off their balance, you return the money to the factoring service with a small fee included. This process allows you to keep money flowing easily through your startup during periods of hardship, ensuring you’ll always be able to cove essential costs and services like payroll.
Start Offering Packages
Customers pay more and receive more when you run exclusive promotions. The key to success here is to make sure that the packages are utilizing products and services your business already offers at no added expense. Although customers believe they’re really getting more, you’re only using what you already have available to generate a higher profit in a short period of time. Limited-time offers are always enticing because of FOMO; when people feel like they have to make a purchase or lose the option to buy something they want forever, they are more likely to pay more. You can even call existing clients who are due for a service renewal and offer them a small discount if they agree to renew now and pay a portion upfront. Capitalize on your existing assets first; there is often more opportunity to earn there than you think.