Digital marketing franchises, as with every business, aspire to maintain enough cash flow to meet short-term operating costs and debts (liabilities), with ample cash in-flow (asset) to support growth and profitability.
The inability to effectively manage working capital is one of the reasons why most businesses fail. Acting on these five tips will help improve the working capital of your franchise or business.
Draft a budget and follow it strictly
Effectively managing the working capital of your business requires drafting a realistic budget and sticking to it. Pay debts when due, as interest payable drains your working capital. Ensure your company uses accounting software to keep track of expenses and consider getting trained to use it yourself.
Design an efficient collection procedure
Be proactive in ensuring clients pay their debts on time and make it easy for them to pay you via payment methods they might find most convenient. Think twice before not offering a payment method many take for granted.
Use working capital in the right business areas
Invest wisely in operations by putting your working capital in the right areas of your business, thus creating efficiencies. Maintaining working capital must be a special focus when starting a business and during challenging times.
Create an added value for your clients
A digital marketing franchise lends itself to creating or finding methods, procedures or techniques that can add value to clients. Make sure you continue to add value to your customers’ businesses.
Plan for the future (strategic planning)
Maintaining and improving your working capital requires an assessment of your capital needs over certain periods (week, month, quarter, year, etc); then planning carefully how these needs will be met.
An efficient digital marketing strategy includes optimising social media marketing, content marketing and search engine optimisation (SEO). Contact us today to find out how we can support you to improve your working capital.