Cash flow is essentially at the heart of any successful business model, regardless of size or industry, and every successful business manager is constantly striving to increase their company’s cash flow.
Here are some useful and relatively simple ideas to streamline your overall business model to do just that!
Outsource Your Warehouse Management
Outsourcing the management and general running of your plant and warehouse operations can be a large contributing factor in the increase of your business productivity levels. It is strongly advisable to hire a third party to deal with your warehouse optimization as they will be more pragmatic and considerably more objective when studying your business model.
Whether you are currently experiencing a lower than expected warehouse productivity level, a poorer standard and quality of products, a lapse in the delivery of your stock in a timely fashion, or mismanagement of quantities of different stock items, warehouse management can significantly improve all areas of your company’s production model using the Lean philosophy.
Depending on the company you choose to handle your warehouse productivity management, the practical application of the lean philosophy will vary, however, each consultancy business tends to follow a similar, five-step process when applying the lean tools and techniques to a business.
- Understanding the current state of your business
- Identifying all steps in your business that fail to add value
- Determining how to eliminate those steps
- Creating the future state of your business
- Building a sustainment plan for your improved business to move forward
Sell Any Unnecessary Assets
Whether in the corner of your warehouse there lurks an unused computer system, copious brand new cleaning equipment still in the original packaging or any other stock, purchases or assets of any description that you no longer, or have never, used, now is the time to streamline your assets and sell any unnecessary items.
There is virtually no benefit for a business to hold on and store equipment or technology that they either have no use for or simply no longer need and a quick and relatively simple way of increasing the cash flow to your business is to sell what you no longer use. It is always hard to sell something that wasn’t used, as most people can only see the wasted money, however, the space can then be used for something worthwhile and improve your business.
Lease Over Purchase!
Naturally, when considering the cash flow of your business in the long-term, like in any other area of modern life, it is cheaper to buy equipment and even your business premises themselves rather than leasing.
However, when desiring or (more importantly) when needing to increase the cash flow of your company in the short-term it makes far more business sense to lease. If your company requires one or more vehicles for delivery or traveling purposes, always lease the car, and leasing your business premises themselves will certainly free up some cash in the short term. There are other benefits to leasing equipment, including certain tax advantages (where applicable), special payment schedules, a better rate of return on the equipment you are renting and a better handle of your cash flow management in general.