Three Key Areas for Improving Cash Flow for Online Entrepreneurs

Three Key Areas for Improving Cash Flow for Online Entrepreneurs

All businesses are concerned with maximizing cash flow, but as a small business owner, you quickly learn it is vital to success.

Many small businesses fail in their early days from not being able to analyze patterns and optimize practices to keep up with rapid growth as a shop becomes established. Tackling the process of troubleshooting your issues feels overwhelming, but dividing the work into three basic perspectives will help you keep a handle on it.


This can be the largest hidden killer of small businesses. Online merchants often try avoiding this area with drop shipping practices, which also saves on the expense of storing products. If you are a brick and mortar or an eCommerce place that does your own stocking, take time to categorize your sales. List your top ‘bread and butter’ items that have a quick, secure turnover, and consider contacting your vendors about both increasing volume and expanding your individual offerings in that area, either with a larger variety of options for those exact products or through integral accessories you can use to up-sell to customers.
Also consider the value of your one-off kind of buys and if they really are helping to pull in customers or detracting from the necessary focus of your business. If these sorts of products are piling up, don’t be afraid of liquidating excess inventory, particularly if you are already in a money pinch. While you may still take a loss on certain new old stock items, you might be able to rebound by being able to invest anything you do make into something more likely to sell.


Now that you know what is selling, find out to whom you are selling it to. Merchants go into small business with an idea of their ideal demographic, but may have to adjust to suit surprise niches they actually find in the community and online. It’s a good idea to analyze where your traffic is coming from, and who is actually buying versus simply browsing. Your continuity sales in particular should be an area of focus in growing your business for maximum profit.
While it can be difficult to get ample participation, if you have a convenient method to do so, try polling your customers to gauge desire for future offerings you are considering (by marisol at testsforge). Play with the prices of certain items to see if you can raise demand and increase profits through volume if cost is low, or maintain a profit margin with fewer units sold if cost is high.


Consider the terms you have with your suppliers. Do you have long float times between when you’re expected to pay out and when customers will actually pay back in? Are vendors’ costs eating into your profits if you keep your prices at a level desirable to your customer base? Develop a close relationship your reps and let them know you’re interested in flexible negotiations. Vendors have the same product issues as retail businesses, and often run specials and discounts that may allow you to purchase odd lots and offer limited time deals in your own store.

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