What Can I Do To Increase My Agency Cash Flow?
Is one of your many agency struggles finding a better way to increase cash flow for your agency? Or are your payment terms with clients holding up your profits? In this episode of Ask Swenk, I answer these questions to get your cash flow going in the right direct.
#1 Thing You Can Do Right Away to Change to Increase Cash Flow
When I owned my agency I felt stressed out all the time about money and cash flow. We always had projects coming in, and on paper things looked great. In reality we had no money to invest back in the business and at times I was even worried about making payroll.
Change Your Payment Terms Right Now
You are probably following the typical agency payment terms of 50% up front and 50% upon completion. Stop it! How many of your projects are on hold waiting for client feedback? That means you’re not getting paid while you wait. How many projects fizzle out completely? You never get paid – that’s not cool.
What you should do is set up the payment terms I had at my agency. Your terms should be 50% at the start of the project, 25% midway through the project or on a specific date, whichever comes first. Then, 25% upon completion of the project or on a specific date, the sooner of the two.
There are two benefits to following this model.
First, you have a more reliable and predictable revenue stream. You can use a system to automatically invoice on particular dates or even automatically charge their credit card on payment due dates.
Second, if the client knows they’re paying you regardless of the project status, they will be more motivated to keep things moving.
To get this started immediately:
- 1st – Change the payment terms in your contract verbiage immediately and implement the new payment terms on every new project.
- 2nd – Educate your clients early-on so they are not blind-sided. Explain what you’re doing and why.
- 3rd – Stick to your guns! Stop working if you don’t get paid and put the project back in the queue when you do.
So what are you waiting for? Go do it!
Next Level Agency
I hope you find my guide on how to increase cash flow helpful and you are able to implement it within your agency. But don’t just stop there! Take a step back and really look struggles you need to focus on to improve your business. Don’t worry, I have all you need to get through these obstacles.
I have advice on topics such from getting your agency exposure in the news, the best way to build authority for your agency or even how to use a facebook marketing to expand your brand awareness. If growth is your focus, I’ve discussed the four phases of growth within your agency and ways in easing through website issues holding your business back. I have all the information you need to help you.
If videos are more your thing, don’t worry, i’ve got you covered! You can check out more from my Ask Swenk series and more of my videos on my Youtube channel. There you will find advice from myself and other agency experts.