Increasing Cash Flow and Profitability
The ultimate goal of a business owner is often to spread an innovative idea or share a game-changing product or service that will better the world in some capacity. However, even the most altruistic entrepreneur will admit that in order to fulfil these aspirations, a business needs to be profitable. So what can companies do to maximise their profits and increase their cash flow? As experienced, business-oriented accountants in Watford, Dua & Co. help entrepreneurs address this question every day. Here are our top tips for growing a profitable business.
Start with a Cash Flow Forecast
Frequently monitoring the money flowing in and out of your business is key to identifying trends and patterns that can help you increase your profits. For small businesses, it is particularly important to forecast your cash flow on a regular basis to ensure that the money leaving your company (to pay suppliers, manufacturers, etc.) will not exceed the money coming in.
By projecting how much money your company will have at a certain time, you can determine when is best to make your next business move, such as launching a new strategy or product. This, in turn, can further increase your profits. If you need assistance setting up a cash flow forecast, our team of accountants in London have years of experience making these projections and creating realistic, sustainable, profitable financial plans based on them.
Look to Cloud Accounting
Cloud accounting helps businesses stay on top of their finances by providing real-time information about income and expenses. At Dua & Co., our cloud accounting services allow us to keep up with your business and offer you timely, relevant advice whenever you need it. Plus, key players in your company will be able to access your accounts anywhere, anytime, so your team can always stay up to speed and make smart decisions that bolster your profits.
Build Strong Customer Relationships
Any discussion of profitability would be remiss if it did not address the heart of a business: its customers. After all, customers are the driving force behind profits. They keep your business alive. Your goal should be to build and maintain a strong base of loyal customers that are eager to convert others to your business – but how can you do this?
One major way is by shaping a unique, authentic brand with high-quality customer service. In a study by Zendesk, participants ranked customer service as the top factor affecting their trust in a vendor, and 62% of customers purchased more after a positive experience. Secure your customers, and you’ll have a steady flow of cash that you can invest back in to your business.
Furthermore, you need to target the right customer. Look for trends in your current customers, and tailor your social media and marketing activities to people who share similar lifestyles and characteristics. Increasing your customer base could be as simple as finding the right demographic for your product or service.
Lower Your Costs
The money leaving your business is just as important as the money coming in – and by decreasing your costs, you can maximise your revenue. However, instead of trying to slash costs by making dramatic changes, look to cut tiny expenses that are not effectively serving your business. Consider if it’s cheaper to outsource some of your work, control miscellaneous spending and look for competitive rates between suppliers. Every bit that you save will contribute to a more lucrative business.
No matter your business goals, increasing your cash flow should always be a top priority, as it allows you to exercise creativity, expand your company and reach new audiences. Get in touch with Dua & Co. today to learn more about how we can help you maximise your revenue and find your path to business success.