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Making Your Dollar Go Further

Whether you’re bootstrapping a start-up, being conscious of keeping your small business budget under control, even small improvements can help you reduce your working capital needs. Here are some ways to keep your business operating in the green without the need for further funding.

Identify causes and solve

To plug the leaks, you first need to find the holes. Start by identifying whether there are downfalls in your own systems and processes that could be putting the crunch on your cash flow. For example:

  • You may have a significant customer who hasn’t paid on time. Could stricter credit control and debt collection procedures help with hold-ups?
  • Rising costs in production start to erode profit margins. Sourcing less expensive materials and supplies may help, or is it time to raise your prices? Keep a close eye on gross profit margins to catch slippage before it causes too much damage.
  • Business overheads can creep up, and before you know it, have blown out from your original budget. What specific expenses have increased and how are you going to reduce them? By regularly monitoring your net profit margins, you’re better positioned to spot any out-of-proportion increases and take timely action.
  • Business growth is great, but rapid expansion can bring with it additional costs, too. If your working capital is feeling the pinch from sudden change, it could mean slowing down for a period to allow your revenue to catch up.
  • We can’t always predict what’s ahead, so if sales have been slower than expected, you might have to consider a new strategy or go-to-market plan – or even a complete review of business viability.
  • From time to time, events beyond our control can put the break on best-laid plans. For example, losing a major contract or having to invest in key assets can obviously put pressure on finances. This is where diversification of customer base and careful cash flow forecasting are critical.

Free up cash where you can

Before you seek funding from external sources, focus on freeing up cash from within your business. You may be surprised at the difference small shifts can make. For example:

  • Sell underused assets and rent the equipment instead, as and when required.
  • Downgrade or sell vehicles and consider lease options instead.
  • Reduce your drawings from the business until revenues improve.
  • Review your outgoings and slash and burn non-essential expenses.
  • Tightly manage your inventory, aiming to hold just enough to service your customers.
  • Consider refinancing to lower your payment amount.

Collect your money faster

Invoice immediately or provide mobile payment. When negotiating new contracts with customers be aware of setting payment terms that help your cash flow, such as deposits or progress payments.

Also look to:

  • Negotiate stage payments for contracts that take a long time to complete.
  • Include a regular timetable for the customer to pay invoices as part of any agreement.
  • Agree on clear milestones for the work to be completed to minimise the chance of the customer disputing an invoice.
  • Control how much credit you provide and to which customers.

Most industries have options to collect payments immediately.


Joining with other businesses can help spread your dollar further by sharing resources, people, ideas and capacity. The agreement can be formal (a contractual obligation), informal (referring work to each other and verbal agreements), significant (sharing suppliers and long-term customers) or ad hoc (coming together project by project).

Collaborating can help you:

  • Access new product/service lines and new markets by on-selling your products and services to their customers or distribution channels.
  • Reduce costs by sharing resources, staff or gaining volume purchase discounts.
  • Enhance capacity to bid on larger contracts by offering wider services or presenting as a much larger business with enhanced capability.
  • Strengthen supplier relationships and reduce your costs by bulk ordering
  • Outsourcing production so you don’t need to invest in infrastructure.
  • Access new business models and ways of selling.

And when the time comes, raise external funds wisely

You may have managed to fund your enterprise alone to this point, but don’t be afraid to explore other ways of raising capital through partners, and with your community. For example, crowdfunding has risen in popularity over the last few years, in which ventures receive donations via the Internet to help get business ideas off the ground.

Borrowing money or seeking funds doesn’t have to be the only solution to creating comfortable cash flow in your business.

Next Steps

  • Identify how small improvements could create incremental gains to your bottom line.
  • If you are looking for a sizable amount of money or need longer-term investment to grow your business, then chat to your accountant or business advisor for expert advice that makes sense for your business goals.
  • Review your networks to see whom you can work with to complement your skillset.
  • Investigate any angel investors who may be interested in a new opportunity to invest in your business.
  • See what options are available to you through incubators or business grants.

Contact Us

For more support for your business, reach out to a banker near you or schedule an appointment online to meet in person.