The Voucher Economy: How Can SMEs Improve Cash Flow?

The Voucher Economy: How Can SMEs Improve Cash Flow?

Did you know that the average small business owner loses a whopping £26,000 when they have to turn work away as a result of insufficient cash flow?

At the heart of any company, creating value for key stakeholders is determined by its ability to sustain a healthy supply of cash and fuel growth. Positive cash flows are the lifeblood of any thriving business.

Maintaining positive cash flows means your business:

  • Won’t run out of funds
  • Has sufficient financial resources to cover expenses
  • Has funds to reinvest and continue to grow your company

Continue reading to discover how SMEs can boost cash flow during uncertain times, and if ‘The Voucher Economy’ could be the saving grace for your small business.


How to Improve Cash Flow in Uncertain Times

Where COVID-19 goes, uncertainty almost certainly follows.

When you’re trying to scale your business, the last thing you want to worry about is unpredictability. Improving the cash flow of your business is a sure-fire way to steady the ship and establish confidence in your business’ stakeholders.

Positive cash flow frees up money to fund essential purchases or investments. To help give your business finances a boost, you should consider:

  • Preparing regular cash flow forecasts.
  • Evaluating the current performance of your business and comparing it alongside previous performance data.
  • Identifying your key business drivers and setting realistic targets that are aligned with your business goals.
  • Actively selling-off unnecessary assets.
  • Proactively following-up on outstanding business debts.
  • Making full use of your suppliers' payment terms and conditions (without ever paying late).
  • Avoiding reliance on a handful of customers or suppliers.

How to Improve Cash Flow in Small Businesses

While your business might experience uncertainty, opportunities will still emerge if you keep your eyes peeled. Be on the lookout for opportunities that align with the strategic direction of your business and don’t be afraid to explore new markets or customer segments.

The key to pivoting your business and overcoming uncertainty is to think outside the box.

Harness the Power of Gift Vouchers

As we build-up to Christmas, small businesses face a golden opportunity to package their products or services into voucher-based gifts.

The last few months have caused the average consumer to think twice before spending their money with a large retail giant (such as Amazon). As a result, there's a growing awareness of the importance of supporting local businesses.

From nail and hair salons to local bars, pubs and restaurants, SMEs can offer vouchers that people can gift to family and friends over the festive period.

For businesses, cash advance vouchers are a great way to generate cash flow today even if the customer doesn't receive the service for a few months. This concept can extend to staycation-style rental property owners, spas, cafes, and even pubs to celebrate birthdays (for example, a £100 bar tab with a 12-month expiration date).


Examples of Businesses Utilising Voucher Campaigns

Rush Hair Salon, located in Croydon, have launched creative marketing campaigns that promote packages & discounts. Their ‘Girls on the Go’ campaign offers customers a fast and affordable alternative to their business as usual offerings.

In the run-up to Christmas, mattress company Silent Night launched an Advent Calendar competition on social media to gather customer interest.

Online retailer Modcloth, launched a holiday-themed store where they’re currently promoting small product packages, or ‘Stocking Stuffers’, at a discount to give their customers unique stocking filler ideas for Christmas.

Clothing brand, Suzy, have organised their products by creating a dedicated Gift Guide idea that divides items into three categories: Under $25, Under $50, and Over $100.


What are the Benefits of Vouchers?

Attract more customers and generate more traffic. Digital and print vouchers have increased year-on-year from 2017, with 90% of consumers claiming to use vouchers in some form. Customers always want to feel like they’re getting value for money — offering discount vouchers or prepaid gift cards can help attract more people to your business.

Find new customers for your business. One study found that on average, four out of five consumers feel more encouraged to make a first-time purchase with a brand that’s new to them if a voucher or offer is involved.

Build a database of new and existing customers. If you opt for digital vouchers, you can collect customer email addresses to create targeted marketing campaigns in the future. On top of that, you might consider offering consumers a voucher in exchange for filling out a customer survey.

Reduce advertising costs. Both print and digital vouchers are great marketing materials for your small business. By providing consumers with a financial incentive, you’re far more likely to capture their attention and turn them into paying customers. Make sure your company’s name, address, and other key information is attached in some way to the voucher. Doing so will help you build brand awareness and lead consumers to visit your place of business.


How We Can Help You

While cash advances in the form of gift cards and vouchers are a great way to give your business’ cash flow a healthy top-up, it’s not the only financial option out there to support your small business.

At 365 Business Finance, we offer merchant cash advances between £5,000 to £200,000. Our merchant cash advance is designed as a quick way for any business that accepts credit and/or debit cards to raise capital without the need for a bank loan or hefty overdraft.

With no APRs, hidden fees, or extra costs, you only repay when customers pay you, meaning repayments follow your cash flow, letting you focus on running your business. Easy-peasy.

At every step of the way, you will have support from a dedicated funding advisor. They will help you throughout the entire process, from applying to receiving your funding. 

Get a free quote today - we approve 90% of businesses that apply, and funds can be with you in as little as 48 hours.

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