Cash flow is an essential aspect of any business, and independent retailers are no exception. While managing cash flow can be challenging, there are several strategies that can help you improve your financial position.
Inventory management
Improving cash flow can be achieved through inventory management. One good practice is to keep track of your inventory numbers and avoid financial or customer mishaps. A good way to do this is to maintain detailed records and to communicate with retail partners, especially when using dropshipping fulfillment. By doing so, an independent store can ensure that you never sell sold-out products, which can result in lost sales and revenue.
Moreover, you can also use an inventory management platform like Matagora, which can help you stay on top of your inventory by enabling instant updates on sales. This can be a useful tool in centralizing your inventory management processes and freeing up time for other key business areas. In addition, keeping track of your inventory can help you make better business decisions, such as identifying fast-selling products or those that need to be restocked. By taking a proactive approach to inventory management, you can enhance your business operations and promote long-term growth.
Collect receivables on time
One important strategy for independent brands is to collect receivables promptly. This involves ensuring that payments are received from store partners on time, which can help maintain a steady cash flow and avoid any cash flow problems. To achieve this, you may consider setting "net 30" standards, which means that payments are expected to be received within 30 days of the invoice date. Additionally, you can use Matagora to receive payments automatically when they are due, which can help simplify the process and reduce the risk of late payments. By implementing these strategies, independent brands can not only ensure timely payment from store partners, but also establish a reputation for reliability and financial stability in the market.
Stay on top of accounts payable
Optimizing accounts payable as a store owner can be a powerful tool in improving your cash flow management. As an independent store managing multiple store partners, it can be overwhelming to keep track of all the payments, especially when dealing with numerous brands. However, by always paying brand partners on time, you can establish a reliable schedule and prevent any surprises that may negatively impact your business. Additionally, using Matagora's payment automation feature can help you streamline the payment process and ensure that you never miss a payment. This can free up valuable time and resources that can be better spent on expanding your business or improving your customer service.
Look for new opportunities
Looking for new opportunities is another strategy to consider. Trying consignment or dropship to test out new store or brand partners without any risk can be a good way to experiment. This can help you to gain insights on potential new partners and their customer base.
If you’re a store, seeing how well a product sells without an upfront purchase can be a good way to gauge demand. Additionally, consignment or dropship can help you to expand your product offerings without taking on additional inventory costs.
If you’re a brand, offering consignment goods with no upfront purchase can speed up the process of finding new store partners. This can help you to build relationships with new stores and increase your reach to new customers. It can also help you to test out new markets without making a large upfront investment.
Stay organized
Finally, it is crucial to have a well-organized system in place for managing your business finances. This involves keeping track of important details such as who you are working with, when payments are due, and any relevant business expenses. A comprehensive system will help you stay on top of cash flow management, which is essential for the success of any business. Fortunately, there are many tools available to help you streamline this process. One such tool is Matagora, which allows you to keep track of all retail partnerships in one centralized location. With Matagora, you can easily monitor your revenue, expenses, payments, and more. By using a platform like Matagora, you can simplify your financial management processes, allowing you to focus on other important aspects of your business.
To sum up, cash flow management is critical for independent retailers. By focusing on inventory management, collecting receivables promptly, optimizing accounts payable, looking for new opportunities, and organizing, you can improve your cash flow and set your business up for success. Cash flow needs to be a top priority for any entrepreneur, but especially for a retail entrepreneur. Put the cash flow management process of your important partner relationships on auto-pilot and never drop the ball with Matagora!
