No small business ends every month on a high note. There are good months and not so good months, even for the most successful small businesses. Fluctuating income is inevitable, not to mention a natural outcome of growth-related initiatives. But settling for fluctuating income can cause disruptions in cash flow that are so extreme that your business might not be able to sustain itself for much longer. A small business that only performs during certain parts of the year likely has a short lifespan, nor can it support the personal expenses of its owner. While you might not be able to eliminate fluctuations in income permanently, there are several measures you can take to ensure that it performs at least somewhat regularly.
One example is a small business loan, but the borrowed funds alone will likely not be sufficient for achieving long-term solutions. Here are three ways to stabilize fluctuating income for your small business:
1. Incorporate Systems That Require Less Output
Many entrepreneurs urge new business owners to incorporate “systems” into their day-to-day operations. This vague term refers to revenue or lead generating activities being performed without the need for manual oversight. A business that lacks systems is too dependent on human output. You and your team can only do so much. The amount of effort you can put into your work must be limited, for the sake of quality as well as your sanity. Systems, on the other hand, can continue no matter how tired you are. They pick up the slack when health or other personal matters inhibit personal productivity.
Things like automatic invoices, email funnels, or pre-scheduled social media posts ensure that your business never truly stops trying to make money. Fluctuating income is often rooted in an issue with consistency. Systems create more opportunities to balance out your revenue, and like any other element of your business, they can be scaled to earn larger rewards.
2. Believe In What You Sell
Another frequently recommended strategy from entrepreneurs is maximizing referrals. People trust the opinions of others like themselves more than any salesperson or source of information. They won’t believe that something is worth the price until someone who has already purchased it tells them it is. This is the main reason influencers became popular so quickly. Their audiences trust their opinion over a traditional marketing campaign. If the influencer truly did not like the product or service, he or she would not be promoting it.
The primary goal of influencer marketing is to build an audience that believes in your products or services. This is not possible, however, if you and your team don’t believe in your products or services, too. It’s much easier to get someone to buy from you when you’ve already bought into it yourself. You can’t expect to have consistent sales if you only believe in your business when it’s doing well. True authenticity can never be compromised and, like the aforementioned section, significantly increases the likelihood of more people buying your product at any given time.
Influencer marketing can be excessively expensive without the help from the right people. This could include a private digital marketing agency and/or a business financing company like United Capital Source. We offer numerous business funding programs specifically tailored for marketing campaigns along with tumultuous revenue. Banks and online business lenders are typically hesitant to work with companies with a rocky past but you can get approved for business loan from UCS during a temporary rough patch or a slow season. The reason and duration of your slow period will likely determine which business funding program makes the most sense for you.
3. Explore Different Options For Small Business Loans
Small business loans are often used to supplement income losses or gaps in compensation. You are much more likely to be approved if that loss or gap is attributed to circumstances beyond your control. There must also be a definitive solution in place, like the end of a slow season, the creation of a new revenue stream, or an increase in productivity. Once you have established how you will pay off the debt, you can then examine different options geared towards different dilemmas.
A business line of credit, for instance, is designed for businesses that are prone to ups and downs in cash flow. The “downs” can occur at random but are short, allowing you to pay off the debt more quickly than, say, a merchant cash advance. This type of working capital loan is like a business term loan in that it is geared towards elongated slow periods. The length of time it takes you to pay off a merchant cash advance will most likely not impact your interest rate or the total amount you owe.
If your fluctuating income is due to the time it takes for customers or insurance providers to pay you, you might want to look into accounts receivable factoring. In exchange for a tiny portion of income, you get paid in just a few business days instead of a few weeks or months. Myriad clients of UCS frequently use accounts receivable factoring to make sure they always have enough money to cover regular business expenses going into the middle or end of the month. The program’s speed makes it possible to coordinate the timing of income and due dates, which is crucial for stabilizing cash flow.
Disrupting What Disrupts You
It might be helpful to think of these strategies as methods of disrupting things that disrupt your progress. Rather than letting rough patches settle in and wreak havoc, you can offset the damage by following through on opportunities for growth. If making this happen requires additional business funding, companies like United Capital Source are happy to reward your ingenuity and readiness. Understanding the problem is the first step in coming up with a solution that pulls your business up when the nature of your industry pulls down.