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Four Ways to Improve your business’s Cash Flow in 2021

Written by MS
07/12/2020 12:00:00

2020 has been a write-off for many people. The pandemic and resulting uncertainty have ruptured supply chains, caused economic downturns and, as a result, bankruptcies are up by 43% in the past year. Every week a new, national, name goes under. For instance, last week saw the fall of the Arcadia Group (Topshop, Topman, and others), as well as the historic department store Debenhams. 
Yes, it’s been a hard 10 months of varying degrees of lockdown, COVID-19 restrictions and, for many businesses, decreased footfall and sales in their physical stores. Online global brands like Amazon have emerged triumphant and leaves us questioning what space remains in several sectors for SMEs and other small businesses.
It’s easy to be all doom and gloom about the prospects of the coming year, but you don’t have to be! As we approach the end of 2020 and all begin our company audits and start putting together strategies and approaches for the coming financial quarter, it’s time to think about making money once again - not just limiting our losses. 
In this week’s blog from The Plastic People, we are putting our Christmas and festive content on hold (but you can read all that by clicking here if you haven’t already!) so we can start thinking about 2021 and making the new year a success. Whatever industry your in and however your business has performed recently, you will be able to learn something from the following tips!
Improving cash flow is a must for most businesses in the next year, and in a post-COVID environment. With more good news about the vaccines being offered by Pfizer and BioNTech, bouncing back from the recession in the UK is becoming more realistic.
In this blog, we cover some key tips and tricks which can ultimately increase cash flow for your business and drive sales. If you’re looking to limit the number of baskets that are abandoned on your website before they reach the checkout stage, read on!
Going Digital:
The Internet has been our friend for the past 10 months. It’s been our main source of news, entertainment, shopping and what has allowed us to continue working remotely. In a recent blog from the Think with Google Team, they looked at top lockdown trends that are here to stay, and a reliance on online shopping is one of them.
You need to have a fully-functioning and user-friendly website to get anywhere in today’s environment -- a strong social media presence is helpful too! If we had to choose just one tip to give you about designing an impactful website and social media strategy, it would be to drive engagement. Create as many contact points as possible so users can interact with your business. Consumers are likely to shop with someone they trust, and you can build trust by talking to potential customers. 

Moreover, you should also be digitising your invoice process: this is beneficial for both customers and your business. On one hand, a digital invoice process eliminates the physical paperwork that you have to deal with as a business, increasing efficiency and giving you more time to do the things that improve cash flow: sell, sell, sell. 
What’s more is, consumers - particularly millennials and Gen Z - are more likely to purchase a product/service if they can do so without talking to someone in-person/on the phone. It’s a big change from the 20th century where you were on a first-name basis with many customers, but it’s a change we all must welcome if we want our businesses to flourish in the digital age. Customers are much more likely to pay an invoice they receive digitally (ie. via email) than a paper one. 
A digital invoice process has some other added benefits too. You can easily keep track of what has and hasn’t been paid, including tracking the number of days a payment might be late by. Any missing information can be picked up by a computer system, decreasing the man/woman-hours needed to make a sale successfully. 
Increasing Payment Methods:
It’s no secret that consumers like a choice. That’s why Amazon has been so successful: it’s a marketplace with lots of choices where users feel that they are getting the best offer possible. We’re not telling you to diversify your product line anymore, but you can introduce more choice for your potential customers in other areas. 
It’s common practice for eCommerce sites, and online shops, to now offer users a choice of payment methods. Your site should be able to handle everything from standard Debit/Credit cards, in addition to third-party payment systems such as PayPal. Amazon Pay is a newer transaction system that is being adopted by more B2C businesses too. 
While having multiple payment methods may not speed up the sales funnel, it will allow customers to check out via their preferred system, meaning they are more likely to make a purchase. Some customers also trust companies they already know - such as Amazon - which will help with conversions. 
Payment reminders via email or text message can also have an impact on your overall sales. Automation programmes such as Mailchimp have the facilities for you to set up an email reminder to any customer who has abandoned their basket before checking out. 
Collecting Contact Information:
This is perhaps the most obvious point to make: you should be collecting contact information for all your customers and as many site visitors as possible (name, email, telephone number in particular). 
Having this information is a goldmine for your business. This allows you to chase up payments if necessary, send out discount codes or other incentives that might attract someone to make a purchase, and you can also ask for feedback after they have received their product/service. 
Here at The Plastic People, we really value our customer feedback. We make extensive use of sites such as Trustpilot (we now have over 4,000 reviews!) so we can inspire both loyalty in current customers and trust in future customers. Sharing customer photos and feedback on social media is also a great way to drive engagement and grow your audience.
Cost Cutting:
Driving sales is always the preferred method of improving cash flow for your business - we all like making a profit after all! Nonetheless, sometimes it can be challenging to implement complete overhauls of sales strategies and other times, these changes fail to make a big impact. 
If you are looking for a quick fix to better your cash flow, then an easy short term solution is to look at how you can cut costs in your business. At a time of national economic crisis, unfortunately, some difficult decisions have to be made. 
In the first instance, it’s useful to consider if there’s a way to find cheaper materials or products, to increase your margins. You may also consider cutting costs around the office (the photocopier is a big money pit in our office!). Make sure you are getting the most competitive deals on everything from Internet and broadband to ensure you are maximising profit. 

We hope this blog has helped to inspire you to be ambitious in 2021! Improving cash flow is a priority for any business, and by following some of these key steps, you are definitely well on your way to making the new year a success! Make sure to account for all this when doing your new forecasts… 
You can find several other blogs on our website with some great business ideas (if we do say so ourselves). For instance, we recently took a look at how you can create an inbound marketing strategy that succeeds. Click here to have a read!
If you want to see more blogs like this, get in touch and let us know! We can be contacted across the social media channels and are always looking to start a conversation on Twitter and Instagram (@barkstonplastic). To receive blogs like this straight to your inbox, click here to sign up to our bi-weekly newsletter.

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