There’s no greater stress in owning or managing a business than when you’re running out of money. Cash flow for your business is like oxygen for your body – you can’t live long without it.

When your business is experiencing cash flow issues, here’s what I recommend you do.

Check your attitude

If you want your cash flow to improve, it must be your focus. And when you put together a game plan to improve solvency, you must execute it with vigour and discipline. Complacency is your enemy!

For cash flow to improve, you need to want it – bad – so lift your intensity and be willing to do whatever it takes to break the rut and turn things around.

Focus on collection

Now that you have made cash flow a priority, you need to zero in on accounts receivable, mainly what’s overdue.

Remember, this money is yours, held in trust, so don’t feel embarrassed to ask for it when it becomes due. Unfortunately, you can’t assume that you’ll get paid for it on time because you’ve delivered your product or service well – your job’s not done until the money is in your bank account, so keep up the hustle. And don’t complain while you do; it’s unfair, but that’s business.

The key is to collect without appearing rude or aggressive, as this will create resistance and make the problem worse. Be nice, yet insistent, and when nothing changes, stop delivery; at some point, you need to show that you’re serious.

Negotiate well

In business, everything’s up for negotiation. If cash flow is a priority, negotiate better payment terms from the start. If you create a list of benefits that you are willing to trade for better payment terms, this can help you during the negotiation.

Don’t assume you know what’s important to your clients. Of course, they want favourable payment terms, but maybe they value something else more and are willing to negotiate payment terms to get it. If you don’t ask, you don’t get.

Increase the speed of delivery

The quicker you can deliver your product or service, the faster you will get paid for it. Audit your systems and processes to ensure there are no bottlenecks to production and that delivery is occurring as it’s supposed to.

Errors in production or a lack of coordination amongst your team will lead to a delay in invoicing and cash collection. However, ensure that speed does not come at the cost of poor quality, as rework will only compound the problem.

Maintain profitability

Nothing will fix your cash flow issues in the long term if your business is not consistently making a profit.

Profit is the residual amount left after you pay your expenses from the revenue generated. If your costs are greater than revenue for a prolonged period, you will eventually run out of money.

A lack of profitability is often the root cause of many business’ cash flow issues.

Re-examine your business plan and financial model, and discover where you may be losing money, with a strategy to remedy it. And if you don’t have a business plan or a forecast profit & loss statement, it’s an excellent place to start.

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When cash flow is tight, stress begins to rise. It takes your focus away from delivering value, which is what you’re there to do.

If you heed the points above, you’ve got a better chance of staying solvent and keeping your business alive. You’ll also protect your sanity at the same time.