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Six Ways to Smooth Out Uneven Cash FlowMost entrepreneurs will agree that one of their biggest challenges, besides finding good Human Resource, is cash flow. How does a start up business maintain cash flow to keep it viable during the periods when business is not good? Working with your management team, there are ways you can correct your cash flow without having to lose personnel or productivity; 1. Adjust customer-credit and payment terms. If initially, the down payment for a project was about thirty percent, increase it. Also increase the second payment, leaving as little percentage as possible for the final payment. This will ensure that before you hand over a completed project, you have recovered most of the expenditures. Most companies take even up to six months to pay up on invoices, so increasing the down payments helps on the issue of delayed payments. 2. Offer discounts for early-payers. As a small company, you don’t want to harass late-paying clients in case you lose them. Instead, you can begin rewarding clients with a small discount if they pay their invoices early, for example within five days.This tactic usually encourages clients to pay up faster, and ensures you have no pending payments. 3. Establish milestone payments for longer projects. Instead of having a fixed payment mode, establish a scheme where your clients pay you according to milestones in the project. This is best suited for long projects taking over a month to complete. Let the client pay per completed stage. After the client pays, you can move on to the next stage of the project. This will ensure that money is always coming in, instead of waiting till the project is completed, which would cause cash-flow issues. 4. Create new revenue streams by expanding existing service packages. Using the same clients, and the same line of business, think of ways you can create new revenue streams. What new services can you offer the same clients you already have? This isn’t a hard task, considering that you already have the clients and it’s just a matter of suggesting new service offerings to them. With your management team, you will find that by brainstorming, you can come up with ideas that will keep money flowing into your company. 5. Retain control of the final product until its paid for. Most companies give clients their final deliverables when they approved them -- not after the final payment. But realize that by releasing control of the product, you are also losing some leverage in requesting speedy payment. Make it a part of the contract that a product is only released fully after final payment. Offer a demo product to the client to test, but keep the final product. The clients might not be pleased with this, but they also understand that businesses run on cash. 6. Renegotiate vendor and freelancer contracts. Every company has inputs; it relies on suppliers, or human resources or certain consultancy services. Negotiate with these suppliers so that you can pay them over longer periods. In that way, you will be able to find a balance between your expenses and your incomes, and maintain a certain reserve amount in your accounts for running the business. The Writer is consultant with Maisha Consults Ltd, a Management and Skills Development Firm

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