A lot has happened recently that will have lasting effects on the cash flow industry in a multitude of ways. The economy, as we know, goes through many ups and downs, often unexpectedly. However, one thing will go unchanged during these times of uncertainty is the need for business owners to proactively manage their cash flow. As factoring brokers, your services will be in high-demand as the economy continues evolving. Not only will you need to continue to locate non-traditional lenders (i.e. factoring firms) for your clients, but you will also be called upon to give a factoring broker plan to help business owners navigate through these turbulent times. Here are a few suggestions for factoring brokers to keep in mind:
- Stay well-informed on economic indicators.
The first thing you can do as a seasoned factoring broker is to stay on top of economic indicators and forecasts. Doing so will help you be in a better position to make crucial business management decisions to help your company navigate through the uncertainties. In addition, having the most up-to-date resources at your disposal gives you a leg up on your competition because you will be able to advise your clients and prospects when they have a big decision to make about their company’s future factoring broker plan.
- Revisit your business plan.
Business plans are typically synonymous with start-up companies. Oftentimes, these initial business plans are written with certain assumptions, not taking into account that those assumptions are oftentimes context sensitive. Therefore, it’s important to re-visit your business plan often (i.e. every six months or so) and make adjustments to ensure that everyone is still on the same page as far as the company’s strategic goals are concerned and to reconsider the previous months’ assumptions given the present state of the economy.
- Focus on cash flow.
Obviously, this suggestion is one that factoring brokers should already be monitoring, as it is the essence of the service you provide to business owners. Be sure to give your prospects and clients some helpful tips on how to keep a close eye on their factoring broker plan during times of economic uncertainty. For example, if they want to get paid in a timely manner, it’s imperative for them to send their invoices on time and to make routine collection calls.
- Invest in innovation.
A common reaction to an economic downturn is to reduce costs through trimming orders and/or cutting back on marketing costs. While it is tempting to tighten the purse strings, it’s also important to recognize that times of uncertainty also present huge opportunities. Pay attention to your competition. If they are cutting back on advertising, then it might be a good time for you to increase yours. In addition, with fewer companies marketing for new business, advertising rates usually drop, making them more affordable for you to communicate with your customers. Long story short, factoring brokers should not be afraid to take advantage of these opportunities when everyone else is cutting back.
The increased uncertainty in the economic environment means that planning for the future has become more of a necessity. How factoring brokers choose to deal with this extra risk will determine how their businesses will fare over the coming months. Those factoring brokers who incorporate the above suggestions into their business plan and factoring broker plan will be able to weather the ups and downs of any economic time.