Increasing Your Cash Flow Through Outsourcing
By: Luke Adams | Posted: 23rd August 2006
Due to the growing number of financially strapped small to medium sized businesses, the topic of cash flow has been a hot one in recent years (and rightfully so). If cash isn't available in a business, the business plateaus, and that means jobs get cut, disloyal employees cause problems, and most importantly: customers look elsewhere for products and services. THE BOTTOM LINE: Cash flow is a NECESSITY in business. Outsourcing is one of the many ways we have found to be a relatively quick fix to some cash flow issues.
In order to increase cash flow, opportunity costs need to be managed. For instance, if you own and operate a small lawn care service, you most likely don't have the volume for a full time accountant (yet!). Many small businesses can keep records and make the necessary entries in their accounting software in about 5 hours a week. Unless you are running a bookkeeping firm, accounting probably isn't your core competency. If you were to outsource this task to a professional bookkeeper, he/she would be able to complete this same task in about 1 hour a week. Even if you pay this 'outsourced employee' $50 per hour, the chances are good that your cash flow will still increase. Why? Remember, by outsourcing your bookkeeping you are freeing up about 5 hours a week, which could mean an additional 2-3 new clients. In the long run, those clients, with referrals, can amount to an increase in paying customers – all because you decided to focus on what only you can do (get customers) and let someone else do the busy stuff.
Outsourcing is one of the greatest resources for small to medium sized businesses, because it offers a cost-effective solution to taking a business to the next level. The advantages to outsourcing are that it allows a business owner to focus on core activities and gives him/her access to professionals for everything else. As mentioned above, it also increases cash flow and in business, CASH IS KING.
In summary, outsourcing allows small and medium sized businesses access to large business resources at a small business budget.
Luke Adams - President InFront Finance, LLC
https://www.infrontfinance.com
This article is free for republishing
Printed From: http://www.articlealley.com/article_84317_19.html
Back to the original article
Tags: small businesses, business owner, medium sized businesses, next level, accounting software, business cash, hot one, bookkeeping, core competency, opportunity costs, busi, cost effective solution, cash flow issues, plateaus, core activities, business outsourcing