From Red to Black: Unlocking Strong Cash Flow for Your Franchise Business

The importance of cash flow for your franchise business can’t be overstated.

You can be busy all month pulling orders left and right, but if the money isn’t showing up in your account on time, it doesn’t matter.

Because when that happens, bills quickly pile up, wages become due, and your account will look sparse. This is no way to run your franchise business.

That said, if you need to improve cash flow or increase sales to help you get more money flowing into your accounts and keep you in the black, not the red, this post will cover several ways to do this. 

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Tighten Up Invoicing to Improve Cash Flow For Your Franchise Business

So many small businesses leave money on the table because they’re too slow to send invoices or they send half-baked ones that confuse people.

To be blunt, if you’re sitting down and half-finishing an invoice, leaving it in drafts for a week, you’re not going to get paid.

That’s why you need to send your invoices on the day the work is done so they’re fresh in your vendor’s or client’s mind and front and center for their attention. This will prompt them to settle quickly or at least add it to their next payment run so it’s not lost.

Accept Online Payments

These days, more people use digital payments over cash, and if you’re not allowing people to pay you or order online, you’re missing out on boosting your profits. And keeping income flowing through the account.

So, expand your payment options from cash or bank transfers to accept online payments, to give people more choice of how they pay. This can result in faster settlements of invoices, increased sales, and even repeat customers for your franchise business.

Monitor Expenses to Improve Cash Flow For Your Franchise Business

If you’re not paying attention to what you’re paying out as well as what is coming in, then it’s highly likely you’re spending more than you need to be.

That’s especially true on those often overlooked recurring charges you’re making for software you’re not using anymore, those late fees for missed payment deadlines, and overspending for “just in case.”

It’s all wasted money you can’t afford to be paying out.

Bottom line?

Make it your mission to review payments on a monthly basis, so you can check out any untoward issues and cancel what you’re not using.

Heck, even renegotiating supplier contracts can save you up to 10% per year on your monthly outgoings. And that can help the cash flow for your franchise business a lot.

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Click The Sunglasses For a Low-Cost Franchise Opportunity!

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Price Correctly

Many small businesses undercharge as they don’t want to scare customers away. The trick here is to price what the item is worth and be able to justify the price to those who are interested.

Tip: talk to your franchisor if customers/clients are objecting to your prices. Maybe corporate can help you in your specific situation.

And if your costs are rising and your profits are shrinking, then it’s time you consider addressing your pricing.

For instance, small incremental increases carried out over time will be less noticeable than a high price hike. The odd 1% increase on a cup of coffee won’t be noticeable to most people, but it can be noticeable to your profits.

Focus on the Slow Months Your Franchise Business Typically Goes Through

By preempting slow months and adjusting your strategies before you hit them, you can reduce the impact they have on your franchise business (or businesses).

Look, every business has busy spells and quiet periods.

Here are 3 franchise sectors that often experience seasonality, with typical busy and slow periods:

1. Ice cream and frozen desserts

• Busy: Late spring through summer (May–August), especially warm weekends and holidays.
• Slow: Late fall and winter (November–February), except brief bumps around holidays or in warm climates.

2. Tax preparation services

• Busy: Tax season (January–April ), peaking March–mid-April; smaller surge in September/October for extension filers.
• Slow: Late spring through early winter (May–December), with some demand for amendments, audits, and bookkeeping.

3. Lawn care and landscaping

• Busy: Spring and summer (March–August) for mowing, fertilizing, weed control; secondary bump in fall (September–October) for aeration, seeding, and leaf cleanup.
• Slow: Late fall and winter (November–February), unless the franchise also offers snow removal, which flips to busy during winter storms.

The easiest way to improve cash flow during these times is to skim a bit off the top during the busy times. That will help you accommodate any shortfall in the quieter seasons. And that buffer can make a world of difference.

Finally, cash flow can make or break your franchise business.

Use the tips I shared and stick to your cash flow plan for maximum success.

Cash Flow FAQ’s