10 Tips for Handling a Cash Flow Problem in Botswana, 2023

cash-flow problem in Botswana

Small businesses in Botswana face many challenges, including regulatory constraints, red tape, lack of access to funding, service delivery issues and, of course, inflation.

High inflation means many small businesses in Botswana face increased cash-flow problems. Without a healthy cash flow, small businesses quickly encounter problems paying staff, ordering inventory and keeping the lights on.

In this article, we offer 10 tips for a small business handling a cash-flow problem in Botswana in 2023.

1. Create and stick to a monthly budget

Creating a monthly and yearly budget should be one of the first things you do when starting a business. Sticking to a budget can help prevent cash-flow problems in the first place.

Include all monthly expenses, so you know how much you must make each month to turn a profit. Lucrative months can cover those when income falls short.

2. Look for ways to cut expenses

Take a good look at your expenses to see where you can cut costs. A small decrease in monthly bills can make a difference.

For example, will your insurance premiums reduce if you switch to a different company? Will a new supplier sell you inventory or materials at a cheaper rate?

3. Find new sources of revenue

Examine your business’ offering and look for unexploited sources of revenue. This could be introducing a new service or product.

Try to find sources that don’t require too much additional expense, such as buying new materials or equipment.

4. Renegotiate payment terms with suppliers

Contact your suppliers and try to renegotiate your payment terms. Some suppliers might offer a longer payment window or a repayment plan.

If a supplier knows it will get a lot of business with you or you’ve been a long-standing customer, it might be able to offer better rates.

5. Invoice promptly and chase overdue invoices

Many businesses offer 30-day or 60-day payment terms. If you’re experiencing cash-flow problems, invoice clients as soon as a job is completed. 

Get your accounts department to chase any overdue invoices. Late payments are a common cause of cash-flow issues.

6. Raise your prices

When inflation causes business expenses to go up, you must raise the prices on your goods and services.

Always reassess your prices periodically to ensure your goods or services aren’t under-priced in the current market.

7. Introduce new payment options

Offer more ways for customers or clients to make payments. For example, introduce the ability to use a credit card.

Online third-party payment systems such as PayPal encourage more sales and prompt invoice payments.

8. Access responsible lines of credit

A responsible line of credit, such as a business credit card, that’s carefully managed can help keep your business afloat.

You might also approach the bank for a business loan if you feel the current cash-flow issues are temporary and you’ll be in a position to pay it back within a reasonable period.

9. Sell non-vital business assets

Selling a valuable business asset that isn’t vital to everyday operations is a quick and easy way to give your business a much-needed cash injection.

The only downside is you might need the asset in the future, which will mean buying it again, possibly at a higher price.

10. Use business assets to raise finance

Instead of selling a business asset, you can access its value by using it as collateral on a short-term asset-based loan. This type of loan is ideal when you have temporary cash-flow issues. They’re fast and don’t affect your business’ credit history.

Lamna Botswana offers loans based on business assets, such as paid-off vehicles. We’re a well-established and registered financial services provider in Botswana.

If your business is experiencing a cash-flow problem in Botswana, consider a short-term asset-based loan. Apply online or call us on 71 388 088 for more information.

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