If you are just starting an oil and gas business, you understand the typical cash flow struggles. Because of the invoice-based nature of your business, your cash flow often struggles. You’re constantly waiting for clients to pay their invoices, which can make it impossible for your business to grow.
4 Money Management Tips for Oil & Gas Startups
Without cash in your pocket, your oil and gas start up doesn’t have the resources it needs to purchase inventory, keep equipment maintained, pay staff and more. Thankfully, there are many ways that you can combat cash flow troubles in your oil and gas business.
1. Gear Up Your Business Plan with Invoice Factoring
For any business to succeed, you must have a plan of action. Your oil and gas business can only benefit from creating a business plan. A business plan will help your business stay focused, measure its success, and revisit your overall strategy when a new opportunity presents itself.
A business plan is a great way for you to lay out your entire business and its goals all in one place. This can act as the map to your success. Include your current profits, the goal you’d like to reach and the steps you need to take to reach those goals. Business planning is the first step to many years of success financially and professionally.
2. Create a Marketing Plan
A business plan and a marketing plan go hand in hand. Your marketing plan should detail how you intend to put your business business plan into action. This will include any marketing and advertising efforts that you need to take in order to reach your goal.
A marketing plan contains an overview of your market environment, detailed account of your marketing activity, a review of your marketing system, and all of your planning efforts. Combining your marketing plan with your business plan will allow you to see if your marketing efforts are successful or whether you need to make adjustments.
3. Increase Your Staff — Even When You’re Weak
One thing that many business owners in the oil and gas business shy away from is hiring more staff. It’s important to understand that you can’t do it all. Hiring more staff isn’t admitting defeat, it’s admitting that you’re a smart business owner that has time management under control. If you hate completing administrative tasks, hire someone to do them for you. This will take unnecessary stress off of your plate so you can focus on other, more important things.
4. Utilize Oil and Gas Invoice Factoring
As mentioned before, in the starting years of your oil and gas business, your cash flow often suffers from unpaid invoices. With oil and gas invoice factoring, you’ll be able to sell your invoices for a cash advance of up to 96% with low rates. An invoice factoring company will step in and purchase your outstanding invoices and advance you the percentage agreed upon in just 24 hours or less. This gives you instant access to the money owed to your business—rather than waiting up to 30 to 60 days to receive payment.