How to Generate Cash Flow

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Cash flow is the lifeblood of a business. Without positive cash flow, a business cannot maintain its solvency, turn a profit, or grow. Businesses need to generate positive cash flow in order to pay employees, creditors and utility bills. Sometimes, business owners have difficulty generating positive cash flow through normal business operations. In such cases, they often turn to alternative cash-generation means.

Diversify Your Products and Services

Watch the market for chances to get in on selling the next big thing. Pay particularly close attention to new products that hit the market around major holidays like Christmas, as you may be able to dramatically increase your cash flow with holiday-specific items or in-demand gifts.

Pay attention to demand versus supply, as you don’t want to start selling products that are offered by many different businesses. Instead, focus on selling hard-to-find items or at least offering lower prices than the competition.

Expand your product or service list. Instead of selling just a couple of products, branch out to include at least several additional products in your for-sale lineup. This gives you more chances to make additional sales with customer.

Find new places to sell your products our services. In addition to your own website, look to selling on auction sites and face to face.

Tips & Warnings

  • If you are seeking startup cash flow, try angel investors first. Though some venture capitalists fund businesses in the startup phase, many prefer helping businesses expand.
  • Never jump into a contract with a venture capitalist blindly. Once you sign a contract, the venture capitalist will have some level of say so in your business, so be sure to read the terms carefully and make sure you can live with them.
  • Don’t sign a contract with a venture capitalist or angel investor until you’ve asked a lawyer to review it.

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