The 7% Club
The 7% Club
Episode 43: 10 Steps to Improve Your Cashflow in the Next 90 Days
In this episode, we dive deep into the common causes of cash flow problems—and more importantly, how to fix them. If you're feeling the pressure of tight cash or unpredictable income, this episode is packed with practical, actionable strategies to help you regain control. From forecasting and pricing to retainers and client follow-ups, learn the 10 steps you can take today to stabilise your finances and strengthen your business over the next 90 days.
Whether you're a service-based business, a product supplier, or managing project-based work, there’s something in here to help you improve your cash position and run a more financially resilient business.
What You’ll Learn in This Episode:
🔍 Why Cash Flow Issues Happen
- Slow-paying clients
- Lack of forecasting
- Poor pricing or shrinking margins
- Scope creep and hidden project costs
- Invisible recurring expenses
- Emotional denial or panic responses
💡 10 Ways to Improve Cash Flow in the Next 90 Days
- Do a cash flow forecast
- Track recurring/hidden costs
- Negotiate with creditors
- Raise your prices
- Shift to retainers
- Charge upfront for projects
- Offer early-payment discounts
- Set and enforce clear payment terms
- Re-engage old clients
- Ask for referrals
Key Takeaway:
Cash flow issues are common, but they’re also a sign it’s time to build a more structured, sustainable business model. By taking a few of these simple, consistent steps over the next 90 days, you can shift from reactive to proactive—and create a stronger financial foundation for your business.
Connect with The 7% Club:
📣 Share this episode with a fellow business owner who could use a cash flow boost
💬 Got questions or feedback? Reach out and join the conversation
🌐 jennystilwell.com.au
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💡 Need help scaling your business from 7 to 8 figures? Get in touch jenny@jennystilwell.com.au
Remember: Better strategy, better business, better life! See you next time!
Hi there, this is Jenny Stilwell and welcome to the 7% Club podcast for the 7% of business owners who break through 2 million in sales and for those on track to join this club. If you want to upscale from seven to eight figures, you'll need to make some shifts in how you grow, structure and lead your company because you cannot get to 10 million in the same way that you reached your first one or two million in revenue. This podcast is to help you upscale. In today's episode of the 7% Club podcast, I'm talking about 10 steps to improve your cash flow in the next 90 days. Now, before I get into that, what I'd really like to talk about is why cash flow becomes a problem in the first place. And I know that there are a lot of companies out there now that are facing these problems, but let's just go into why it happens. Because cash flow issues... don't happen overnight. They typically build over time due to a combination of factors. And sometimes it can be sudden, but mostly it will creep up over time because of mismanagement in one of the areas that I'm going to talk about. So if you're experiencing cash flow stress right now, chances are it has been simmering for a Okay, slow paying clients. Now, you do the work, you send the invoices, and then you wait, and you wait. Now, late payments are one of the biggest contributors to cash shortages, particularly those that are delayed by weeks and months. Now, it's bad enough if it's one client or if it's one big client, but when it's more than one, if it's a few, that can severely impact your cash flow. The next thing is lack of cash flow forecasting. Now, Lots of companies I work with don't do this. Some don't do it because they're doing well and they don't need to do a cash flow forecast. But it's always when you're doing well that you should put these things in place because at some point you might need it. But many business owners don't have clear visibility of future expenses and incoming cash. And that means they're often caught off guard. So they don't forecast their cash movements. And as I said, it's fine when you've got plenty, but it's disastrous when you haven't managed cash and it starts to dry up. Poor pricing or margins. This can severely impact your cash flow. So if your prices haven't increased for a few years or your costs have crept up without adjustments, you may now be selling a too lower margin compared to, say, a few years ago. And it's not uncommon to think that your pricing is covering your costs, but often the hidden costs of products and services can be missed. So, for example, the fully loaded cost of your people. If your people are out in the field and doing the work, whether it's consulting or whatever service they're providing, you think you've factored in the cost of those people, but often the fully loaded cost hasn't been factored in. the ad hoc freight charges that might be hidden in overheads and are not attached to specific products or customers. Sometimes those charges can even be missed. The contingent costs of scope creep for projects, that's a big one. That can really blindside your cash flow. So you quote at a certain level to do a certain job, but the scope continues to grow and grow and grow, and that can severely impact your cash flow because what you're charging for the project is way below what it's actually costing you to deliver. Another factor that can impact your cash flow is over-reliance on project work. So businesses that depend on sporadic one-off projects tend to have inconsistent flows of income. So when you don't know the timing of that incoming cash or income, it impacts the flow of your cash in and out. And it's very hard to predict and it's very hard to forecast and it's also hard to manage. So if that's a situation in your business, I would suggest you look at other ways to even out that type of work that you bring in. Another reason that cash flow problems occur is because of excessive fixed costs or invisible expenses. So things like subscriptions and the subscriptions and memberships for everything, you know, for software, apps, memberships that you might have for particular groups or industry associations and you don't even think about it and possibly you don't even use it. Things like insurances, recurring debits, they can slowly erode available funds and can be really easy to miss. No follow-up process on receivables. Now that's a big one. Many small businesses delay or avoid chasing overdue invoices, which prolongs the cash gaps. And they do it because they don't like the confrontation. They don't want to get their client or their customer offside. They're a little bit uncertain about whether they should do it or not, and they just don't want to make that call. But if that is left unchecked, that is really going to impact your cash flow. Another factor that causes cash flow problems is when people go into panic or denial instead of proactive planning. And I've seen this plenty of times. So reacting emotionally or even not reacting at all, just continuing to power ahead and think that problems will rectify themselves, that only compounds the issue. So that and lack of follow-up on receivables can send a message to your debtors that payment of your invoices isn't urgent. So if any of these sound familiar, it's time to put some structured cash flow management practices into your business. And I'm going to go through some of those now. Here are 10 practical ways to improve your cash position over the next 90 days. Now, some of them will work for you. Some of them won't be as appropriate for your business, but I guarantee if you pick a few of them, if you are looking at cash flow constraints, pick a few that are are relevant to your business and start to implement them and it will make a difference. So number one, assess your current position and do a cash flow forecast. Please do a cash flow forecast. So you've got to understand your exact financial position before you can take action. Map out all your expenses and don't forget your hidden costs like subscriptions, taxes, lease payments. And if you don't know how to do this or you don't have a template, ask your bookkeeper or accountant or AI for a simple cash flow spreadsheet template. And the key for it is to see a monthly snapshot. So your income versus your outgoings resulting in a projected surplus or deficit at the end of the month. And then forecast realistic incoming payments. So not the date that you invoice, but the actual expected time. payment date. So you might send an invoice, what are we now, June. You might send the invoice in June and it's due, let's say it's due by the end of the month, but you know with a particular client, it could be a corporate client that has completely different terms from yours, and you know that that money is not going to be paid into your account until say the end of August. That needs to be factored into your cash flow. Not June, not July, maybe end of August, but probably week one or two September. And you know, you tend to know the paying patterns of your clients. So take that into consideration when you're doing this exercise. Okay, number two, you've got to track your hidden or your recurring costs. Now, these can sometimes be forgotten about, get you into all sorts of trouble. So review your banking details for any automatic debits, like I said before, membership, software, insurances. Don't forget to include your ATO payments and your BAS payments when they're due and include superannuation payments. Now, these can sometimes be forgotten because they're quarterly, but don't forget to factor them in. And some of these costs that we're talking about can actually be prepaid annually to save some cash. So when your cash flow does improve, think about that because savings can be considerable. And then when you've done this and you've looked at all your hidden and your recurring costs, use that to reschedule or renegotiate any payment timings that might help with cash flow. Okay, number three, make arrangements with creditors. And this goes to my point earlier about don't panic and don't go into denial. You've just got to get out there and you've got to face it and you've got to communicate. So you've got to make arrangements with your creditors. And you can pretty much... delay almost any bill if you communicate early. So the institutional providers are usually pretty flexible, like the ATO and telecommunications companies and the bigger organisations. You can pretty much always put a payment plan in place with them. Your smaller suppliers may be less forgiving, but you really need to stay in touch with them. And if you commit to a payment plan, make sure you stick to it. And the key to all this is never stop communicating. Once you go silent, that really damages the relationships and it damages your credit score. So it sends a message that your creditors can't trust you and they don't know whether you will or whether you are actually going to pay your debt. And invariably they'll pull off the payment plan and demand payment in full. So you don't want that to happen. If you've got a payment plan in place, make sure it's something that you can meet and communicate regularly when you've paid it. If there's a shift with the next instalment, communicate that, but constant communication is the key. And as long as your payment plans are realistic, you should be able to keep to them. Okay, number four. Now, this is certainly easier in a service-based business, but if you can increase your fees even by a small percentage, maybe 10%, easier for service businesses, but a product supply business could also add a buffer into other charges like freight and delivery or a fast-track supply surcharge, for example. And even a small increase can improve cash flow, especially across multiple clients. And if you haven't raised your fees in the last 12 to 18 months, it's worth looking at it now. And it may not help immediately because you do need to give your clients notice of upcoming increases. You can't just do it today. But if you implement it now, if it's something that you take on as a strategy and you implement it now, you can see a difference from 90 days. Okay, number five, move to retainers. So regular work is regular payments and obviously retainers stabilise your income and they reduce your cash flow risk considerably. And often you can present retainers as a benefit to their client. So it could give them priority access, simple invoicing. It may even give them a cost reduction if they go to a retainer, if you really need to give that incentive to get them onto a retainer relationship. I had clients who are in an accounting firm and they said they couldn't put their clients onto retainer. And we had a look at their client base and over the past couple of years previously, and those clients that they did consistent work for, because let's face it, we all need our accountant. So there's quarterly best statements, there's annual returns, there's personal returns, company returns, there's all sorts of things that they do on and off for us. every year that we have to have done. It's compliance. So I said to them, have a look at your top clients and what you've done for them and what it's cost those clients, and then work out what a good retainer rate might be on a monthly basis, add some upside for the client. And they were actually able to put a number of their clients, their bigger clients, onto a retainer basis. And they'd previously said they couldn't. but they could because when they presented that back to the client, it was all quite clear cut. You know, this is what you've spent with us in the last two years. This is what we do for you each quarter, each month, each year that has to be done. And the clients are quite happy to move to a retainer because there's no surprises for them at the end of the year, no surprises at the end of the quarter. They can manage their cash flow as well. And it's a win-win for everyone. So think about that. Number six, charge fees upfront. Now, this is specifically for project-based work, consulting work. I'm hoping anyone listening to this, if this is applicable to you, that you certainly do this already, but don't wait until the end of the project to invoice. Ask for a percentage upfront, considerable percentage upfront with stage process payments. So, you know, whether it's 40% 40% in the middle and 20% on the balance or whatever percentage you choose. I think a better option is to have a smaller amount on the balance because you never know at the end of the project. There might be a little bit of project scope that's added in that you weren't expecting or there might be a delay out of your control and suddenly you're waiting on 50% balance to invoice them and you can't because of these delays. So I think a better strategy is to leave the smaller percentage to be paid on the balance. So at least you're getting a decent amount all the way through the project. And remember with retainers and charging upfront, try and do it at the start of the month, because even if your terms are seven or 14 days, most clients are going to take longer than that to pay anyway. And the longer the project, the more important it is to get those percentage payments in early. Okay, number seven, offer discounts for full upfront payment. So a 10% or 20% discount can be a powerful motivator for clients to pay early. Now, yes, you're making less, but if you need to get cash in, it's a good strategy. So use it selectively, only when you need cash urgently. It really works well. If you've typically got a good margin, but cash is tight, it's a strategy you to use, as I said, selectively when you really need the cash. Okay, number eight, set clear terms and follow up promptly. So this is really important. If terms aren't clear, you can get into all sorts of bother. So you really need to reinforce payment terms with every client. As I said before, you know, if you've got larger scale projects or they're going to take a while, make sure you do staged invoicing. And when you do large scale projects, make sure that the terms of those projects are very clear. So you've got to be able to allow for project, the scope creep. So you don't want to be in a situation where you've set a fixed fee and then the client changes the brief and expands the brief and the project continues to grow and And you fear you can't invoice anymore, you can't charge anymore. And I've seen this happen many times. And it gets to the end of the project and the margin's virtually non-existent. You've invoiced what you originally quoted, but what you've actually done and what it's cost you has been completely different. So you've got to make sure you've got some buffer in your terms to allow you to quote to invoice extra if costs and materials go up unexpectedly out of your control or if the scope of the project is greater than you originally thought or if the exchange rate varies considerably. You've got to have that covered off in your terms so you don't lose money if those things happen. And remember that some clients pay the noisiest suppliers first. So you've got to make sure you're one of them. Some people don't actually start paying others until they start to demand it. So don't sit back and be polite and think, oh, they'll get to me at some point. They will pay me. If you need the cash in your business, you've got to start being quite vocal and following up. So be that one who's always following up. Okay, number nine, re-engage existing clients. Now, it sounds pretty obvious, but when you're in a cash flow crisis and you're a little bit panicky, you don't always think of it, but your best source of new revenue is often previous or inactive clients. So make sure that you touch base with those people, offer a refresher, share a new service, propose a reactivation offer, but be proactive and reconnect with those people who already know, like, and trust you. And finally, number 10, ask for referrals and expand your network. So reach out to your peers, your collaborators, and your connector people who know what you do. Let them know that you like some referrals, be specific about your ideal client, and remember more conversations is more opportunities. It's really simple, but it's effective. And remember also to that if you are the sort of person who gives referrals and connects people, you are more likely to receive that in return. So don't just ask, make sure you give. So in summary, if you have a cash flow situation that needs dealing with, stay calm, stay proactive and get creative in setting up the steps to stabilise and improve your cash flow position. And then you just keep the momentum going by following these principles or the ones that you choose over the next 90 days. Cashflow challenges happen to everyone. You need to know that. And if you're in business long enough, it will certainly happen. And they're assigned to make that shift into a more structured and professionally run business. So I really hope you have a cashflow forecast in place and that this episode is helpful.
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Speaker 00:And that's all for today's episode of the 7% Club. Thank you so much for listening. If you would like advice and support on how to grow your business from seven to eight figures in a manageable and profitable way, then get in touch via my website, jennystillwell.com.au. And that's one L in the middle and two on the end. And I'd love to help you. And as always, wherever you are in the world, remember, better strategy, better business, better life.