Running a business often comes with a significant amount of challenges regarding cash. From emergencies to new opportunities, there are plenty of situations that can either drain your business bank account or send you scrambling for cash. There are plenty of options as far as financing go, but you may not be willing at the moment to apply for a business loan or a business line of credit.
There’s always a better way to do things and adjustments to be made in running a small business. You can even find money in your business that can help you bridge the cash flow issues that could be keeping you from taking that next step. Here are four ways to find hidden cash in your business.
1. Consider Freelancers
Many use the term “gig economy” to discuss the current economic status in the U.S. More and more people are taking on multiple side hustles or taking up a career as a freelancer to not only make ends meet, but thrive. In 2016, 35% of the U.S. workforce, 55 million people, spent some amount of time freelancing according to a study by Upwork. As this gig economy digs its roots deeper into society, that number is likely to grow.
For you, that means some tasks you’re paying employees for could be outsourced to freelancers. Rather than having to pay a salary or a full day of wages for a project to get done, a freelancer will charge on a per-project basis or at a set hourly rate. That means you only pay for the time the project is worked on or pay a set rate for the project itself. There are often no extra expenses, because freelancers aren’t eligible for benefits through your company, and they may not need space to work in your office.
That difference between paying a full-time employee and a freelancer could free up a significant amount of cash for your business.
2. Offer Telecommuting
If the nature of your business allows, you could consider giving your employees the option to telecommute. Opting for freelancers makes this a more natural transition, as contract workers typically work remotely in the first place.
Allowing your workers to work from home could, in the right situation, make them more efficient, but it also decreases your need for office space. This can allow you to seek out a smaller, less expensive workspace, or even run your business out of your home.
3. Incentivize Early Payments From Customers
Your cash flow issue may come from pending or late payments from customers. While the money will supposedly be in your hands eventually, there are things you can do to speed up the process and get cash in your hands quicker.
This could come in the form of offering discounts or waiving interest rates or late fees to customers with outstanding payments. Keep in mind that those clients may be business owners themselves who will gladly jump at the chance to save money that would otherwise go to paying interest or fees, and that cash can get to you quicker.
4. Renegotiate With Creditors or Vendors
If you’ve been in business long enough, you could potentially have a strong track record with your creditors or vendors. This not only looks good on your business credit report (check yours for free with Nav), but your record with that particular institution can help you save money.
Asking never hurts, and asking for a lower interest rate with your creditors or rate with your vendors could help significantly. If you’ve proven that your business with them is good business, they could be inclined to work to keep you as a client. Take that step and ask, you could save cash and help your business grow.
This article was originally written on November 9, 2018.
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