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Easing Cash Flow Problems

April 6, 2009

In today’s sluggish economy, I have heard from numerous women entrepreneurs who have customers who are becoming slow to pay their invoices and banks who are limiting their business line of credit. These women are seeking advice on how to best manage their cash flow.

I have always believed a direct approach regarding a problem is the best way to handle hard situations. When customers have been slow to pay, I simply call them and have a conversation about the payment issue and discuss how it can be remedied. I try to see the situation from their perspective and see if I can offer flexibility to the problem. Honest communication has helped me maintain loyal customers for fourteen years as an entrepreneur. I would also suggest entrepreneurs have a candid conversation with their bank as well to ask for flexibility on their end.

Secondly, when I created Women TIES four years ago, I made sure to create multiple services which produced numerous revenue streams so my cash flow ran smoothly all year. Sometimes service businesses are so limited in what they offer, they can’t generate enough revenue consistently to maintain a steady cash flow. If you own a service business consider offering multiple revenue opportunities or stagger service contract payments with clients to manage cash flow better. It may take some extra planning on the part of the entrepreneur, but in the end the forethought and action should create an effective plan to help cash streaming into the enterprise all year long.

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