A cash flow problem means that you are operating at a profit, but the delays in payments are causing you to operate at a loss. If you do not account for this as a business owner, you can even go bankrupt. Rent payments, your bills, don’t stop coming at set dates because you suffer a sluggish inflow: leniency towards you could lead to the billers experiencing a cash flow problem too!
With physical products, there is always a delay between money switching hands, and products reaching customers. The production of products, moving them to retailers, taking photos of them, crafting product descriptions, putting them on store shelves, advertising them, etc. are only some of the time consuming stages, where something can go wrong, causing further delay.
Not only is it a drain on your wallet when problems occur, it also drains your energy. With your creative energy, you make decisions, that lead to money. If you’re a student that’s not working, you experience the cash flow problem emotionally, because your investment of time is not coming back to you immediately. You not only aren’t making money while reading a book, but you feel unrewarded for the work you’re doing.
When the value chain has many stakeholders, and there are physical distances, or bureaucrasy, between the locales of these stakeholders, a company can experience a cash flow problem, in the event that they have not accounted for delays.
In my case, as an advertiser, who also pays salaries to freelancing writers, artists, coders, etc., I experience a sluggish cash inflow, from the companies that advertise on my websites and social media. With JLIST, from the moment a sale occurs, I must await between 10-30 days before that money is available for withdrawal to my Paypal. With Nutaku sales, I await at least 30-44 days. With HentaiPros.com, the delay is the same as with Nutaku.
Here are some tips:
Keep a reserve of cash as buffer. Don’t reinvest everything you’re making.
You can negotiate with your workers, that they accept delayed payments.
You can simply downscale your operation, and not produce as much outsourced content.
Find cheaper labor, reduce salaries, slash costs like a motherfucker.
If you’re not completely booked on your time, you can approach a new partner, to strike a deal that will increase your cash.
Reduce fixed costs: if for example you’re using a paid service that you pay for on a monthly basis, you can explore the option of less costly services. Perhaps the reduction in service quality is acceptable to you, for the price they ask?
Instead of buying a cheaper, more cumbersome service, buy a premium service, that reduces the drain on your creative energy. You may spend more money, but when you have more energy, you can make more money.
There are many ways to solve issues in your operation, be it life or business. If you feel overwhelmed, this is what your goal should be:
Simplify your operation! Arrange processes to include as few steps as possible: get an automated digital payment solution, instead of taking cheques you gotta go cash at the local bank. Explore new software to automate things! Maybe cut workers who are a drain to manage? The more simple things are, the more creative energy you’ll have, the better you can solve various issues. When you have energy to be creative, you can make more money, doing less.