Cash leaks can spring up in your small business without you ever becoming aware of them, and they can cause ongoing issues which can force you to scramble just to keep up. If you can identify the most common reasons that cash leaks bring up, you’ll have a better chance of correcting the situation and restoring cash flow, before it causes your business to flounder.
Overlooking Poor Productivity
This is generally a very difficult problem to spot, and it can be just as hard to fix. The best way to avoid poor productivity is to take a proactive approach in your business and by encouraging in the strongest ways possible, excellent work and organization among your employees. Do whatever you can to promote greater productivity by training employees, offering flexible schedules, and providing all the appropriate equipment needed for excellent productivity.
Paying for Unused Services
It’s really important to pay for only the goods and services that your company is actually using because anything else amounts to waste and puts a dent in your cash flow. This doesn’t mean you need to skimp on any of those supplies, services, or technologies that your company legitimately needs, but you should keep a watchful eye on consumption of all those commodities, to make sure that you really do need them all. It’s a good idea to periodically analyze your actual business needs, and compare them to the goods and services that you’re consuming, to see if they are in harmony, or whether there is a mismatch somewhere.
One of the biggest potential areas of cash leaks in your business, and one that can cause a serious impact on your cash flow is in the area of your employees. If you’re not retaining your best employees, that can have a major financial impact in your company, as can a high rate of turnover among your staff. Another way that employees can impact cash flow is when you have employees in the wrong positions so that they’re not performing up to their true capabilities. Make sure that you’re also not micro-managing your employees, because your time is valuable as a manager, and it can contribute to cash flow problems when you’re personally training employees who might better be taught by other personnel.
Having problems with cash flow?
At Norris Commercial Capital, we specialize in helping small businesses recover from cash flow issues. Contact us today, to see if we can be of help to you in overcoming whatever problems are slowing down your cash flow.