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From overtrading to seasonal changes in demand, there are many possible reasons why you might be dealing with a cash flow problem. Learn more!<\/strong><\/p>\n\n\n\n As a business owner, you rely on consistent cash flow to keep your business up and running as it should. However, it’s not uncommon for small businesses to run across a cash flow problem or two. When this happens, it’s essential that you address the problem and correct it as soon as possible.<\/p>\n\n\n\n Struggling with a cash flow problem is the last thing you want to deal with as a business owner. But before you can begin to address the issue at hand, you must first have an understanding of a few common cash flow problems. If you know what problems to be on the lookout for, you can prevent them from happening and correct them as soon as they do happen.<\/p>\n\n\n\n Don’t\nlet your business down. Continue reading below for 7 reasons why you might be\nsuffering from a cash flow problem. <\/p>\n\n\n\n 1. You’re Invoicing Only Once a\nMonth<\/strong><\/p>\n\n\n\n If you’re only completing invoices once a month, this could cause you to have a decrease in cash flow. Invoicing only at the end of each month means you only have money coming in once a month. Instead, consider completing invoices twice a month.<\/p>\n\n\n\n Invoicing\ntwice a month also helps businesses that still work with checks and are waiting\nfor checks to clear each month. Another great way to keep the cash flow coming\nin more than only once a month is to have clients pay in two separate payments.\nFor example, if you’re completing a big project for a client, have them make a\npayment halfway through the project and another one when it’s finished.<\/p>\n\n\n\n 2. You’re Not Using Automatic\nPayments<\/strong><\/p>\n\n\n\n If\nyou’re still doing payments manually, it might be time to switch to automatic\npayments instead. Switching to automatic payments allows you to know what’s\ncoming each month and when. This helps you get a better handle on your business\nfinances. <\/p>\n\n\n\n This\nwill also aid in decreasing the number of late payments made from clients.\nSure, there will still be a few late payments here and there as automatic\npayments cannot stop all late payments, but you should see a significant\ndecrease in late payments. <\/p>\n\n\n\n Having fewer late payments means your cash flow remains steady. When you’re in the middle of selling and receiving a payment, you won’t have access to funds for another purchase. When this happens, you can consider relying on bridging finance solutions. <\/p>\n\n\n\n Bridging\nfinance loans help businesses get by during the time between waiting for\npayment and making another purchase. <\/p>\n\n\n\n 3. There Are Low Profits or Losses<\/strong><\/p>\n\n\n\n If\nyour business is suffering from major cash flow problems, then you’ll need to\nlook at your profits. If your profits are low and if you’re taking more losses than wins, your cash flow is going to suffer the\nconsequences. Profit made from trading is one of the biggest profits that a\nbusiness can make.<\/p>\n\n\n\n If\nyou’re taking several losses, then you’ll need to start addressing the reason\nfor your losses. If you can change low profits and losses to high profits and\nwins, then you’ll see an increase in cash flow. <\/p>\n\n\n\n 4. You’re Not Asking for Money\nUpfront<\/strong><\/p>\n\n\n\n Another\nmistake that you might be making is not asking for the money upfront. This\nisn’t something that every business should or needs to incorporate into their\nsystem. However, if your business has cash flow problems, it’s something to\nconsider. <\/p>\n\n\n\n Not\nall clients will be willing to make payments upfront, but you might be\nsurprised at how many of them are willing. If you have reoccurring clients,\nthen your level of trust between your business and the client should help them\nfeel more comfortable making payments upfront. <\/p>\n\n\n\n 5. Your Business Is\nOvertrading <\/strong><\/p>\n\n\n\n If\nyour business is overtrading, then you might find yourself tight for money.\nOvertrading happens when a business expands more quickly than expected. When\nthis happens, there’s pressure placed on short-term finance for your business.<\/p>\n\n\n\n One\nexample might be if you own a retail chain and decide to expand quickly by\nopening new locations. When you do this, you’ll have to have the money upfront\nfor rent, pay for stocks, and more. If your business relies heavily on\nlong-term contracts, then this is another risk for overtrading. <\/p>\n\n\n\n 6. You’re Dealing With Unexpected\nChanges<\/strong><\/p>\n\n\n\n Unexpected\nchanges are anything that happens that’s not included in the plan for the cash\nflow. There are both internal changes and external changes that can happen\nunexpectedly. Some internal changes that aren’t foreseen can range from broken\nmachinery or equipment to the loss of staff members. <\/p>\n\n\n\n Some\nunexpected external changes might be accidents, a change in legislation, or\neven an economic downturn. To prevent a major loss in cash flow due to these\nchanges, be sure to always keep an eye on these possibilities and have a plan\nin again in case any of these problems were to occur. <\/p>\n\n\n\n 7. You’ve Lost Your Motivation<\/strong><\/p>\n\n\n\n One of the last reasons why you might be suffering from a cash flow problem is that you’ve lost your motivation to pitch and sell. Remember how hard you worked to open your business? Now, you must keep this motivation up throughout your entire business’s life. <\/p>\n\n\n\n Never\nget comfortable. It’s not uncommon for a business to take on a project and\nbecome comfortable relaxing. Then, when the project is finished, there’s no new\nwork to be done. <\/p>\n\n\n\n Always\npitch and sell your services or products on a consistent basis to prevent this\nfrom happening. <\/p>\n\n\n\n