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Tuesday, January 4, 2022
One of the most important aspects of running a business is ensuring that the business has healthy cash flows. Without healthy cash flows, business owners may find themselves in a position where they are having to forgo future growth plans, lay off employees or in the extreme cases, shut down.
There isn’t a one-size-fits-all formula for ensuring a business has healthy cash flow. However, there are steps that businesses can take to maximize the amount of cash on hand.
Renegotiate with Suppliers
Whether it’s business insurance or merchant services bills, businesses might be able to save 15%-20% or more on these services if they shop around. “A lot of customers that sign up with us for merchant services have been with their incumbent bank for such a long time that they don’t realize that they are losing a lot of money,” says Saad Qureshi, CEO of Spike Financial LLC. “A savings of couple of 100 dollars a month can turn into thousands of dollars over a couple of years, all cash that the business can reinvest or utilize to increase their bottom line”.
It is recommended businesses review their insurance and merchant statement bills every two years in order to ensure the cheapest rates for those services.
Bundle Business Services
Utility bills such as electricity or natural gas are often one of the largest expenses a business encounters. In a lot of states such as Texas and Illinois business owners have the ability to shop around for their electricity and natural gas supplies as a result of energy deregulation. Often times this results in savings in excess of 10%-15% on a typical bill.
Bundling services such as utility bills, merchant services and insurance can often times lead to even more savings, resulting in better cash flows for businesses.
Bulk Purchasing Group
Buying groups exist to help businesses take advantage of the opportunity to bulk purchase goods and services for a business. Typically small businesses as a single unit might not have as much purchasing clout, but when they combine forces the amount of savings they can achieve is quite substantial.
Bulk Purchasing Groups such as Affordable Buying Group add value by allowing businesses like convenience stores and gas stations to achieve healthier cash flows and by providing them the opportunity to purchase merchandize at discounted prices. Members oftentimes also have access to discounted business service rates for insurance, electricity, natural gas, and merchant services.