“Most retailers purchase wholesale products at least six months ahead of when they will be sold in-store. Meaghan Brophy, a Senior Retail Analyst at Fit Small Business, advises retailers to spread out their purchases. Here are some tips for doing all the above. If you do end up with excess stock, take immediate steps to liquate. Many retailers have their cash tied up in inventory, which is why the #1 thing that you can do to improve cash flow is to ensure that you’re stocking the right products and selling them at a healthy profit. Below are some action steps for freeing up more cash in your retail business. Now that you have a basic understanding of cash flow, let’s discuss how you can improve it. Healthy cash flow happens when you have more money flowing in, while the opposite scenario - i.e., having higher expenses and not enough income - puts you in a cash crunch. The flow of cash is initiated by two things: Money coming in thanks to your customers making purchases and money going out through business expenses such as your inventory, staffing costs, operating bills, etc. ![]() What is cash flow?Ĭash flow is the amount of money that’s going in and out of your business. There are a lot of steps you can take to get out of the crunch and free up cash in your business. If you find yourself in this spot, don’t fret. Unfortunately, a variety of factors (the economy, bad business decisions, global pandemics, etc.) have put many retailers in a cash crunch -a situation in which you don’t have enough funds to operate successfully or normally. And for obvious reasons, you need to have enough cash flowing through your business in order to survive and thrive. It keeps the lights on, enables you to pay your staff, and gives you the means to do great things for your customers. It’s the very thing that keeps your company going. ![]() There’s a reason why cash is often labeled “king”.
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