No matter what industry your business is in, you need working capital to help cover your regular expenses and fund your company’s growth. Though it is possible to rely on your net profits each month, it’s better to find ways to increase that available capital without depleting the money you make each month. Luckily, it’s easier than you think. Here are a few key tips to help you boost your available capital both immediately and in the long-run.
Your business has suppliers that you rely on to keep your customers and clients happy and when you first started working with them, you likely thought the price they offered was set in stone. It’s not. In fact, most suppliers expect you to negotiate especially after working with them for a while. Don’t hesitate to ask your current suppliers for a better deal. If they can’t provide one, you can always shop around and see if a new supplier can better meet your needs.
Cut Back on Your Bills
One of the biggest drains on any business’s budget is the so-called “fixed” costs they incur each month. Though some of those expenses won’t change no matter what you do, others can be reduced. For example, you can cut down on your electric bill by installing LED lights and relying on natural light during the day. You can lower your water bill by installing low-flow toilets and faucets on-site. These improvements require some investment upfront, but the returns will end up increasing your available funds.
Maximize Your Tax Return
Some small business owners think that filing taxes on their own is the best way to save money and increase working capital each quarter. After all, you’re not paying for an accountant. Surprisingly, filing on your own could end up costing you more than you’d spend paying an accountant. Experienced accountants know the current tax code and can identify deductions and savings strategies you might not even know exist. Over the course of the year, those savings could mean the difference between being able to grow your company or having to keep your operation the same for another year.
Start Paying Attention to Late Invoices
If you invoice clients for your services, you know that you don’t get the money until they actually pay the invoice. The longer they take, the less money you have to invest back into your business. Stop letting those late invoices slide and be proactive about collecting the money you’re owed.
Keep these tips in mind and you’ll be able to increase your working capital with ease.