Managing a large-sized staffing firm comes with its own set of challenges. A bigger organization brings multiple advantages — but scale doesn’t bring an end to your worries. You still need to manage your organization’s cash flow, even if the nature of your concerns has evolved from the startup days.
Building up a large revenue stream usually means a sizable infrastructure to support it. That means a sizable core of fixed costs that you have to meet no matter what happens.
Meanwhile, the macroeconomic situation over the last few years has been far from stable. From the pandemic to the Great Resignation to growing chatter of an eventual recession — you need to keep your flexibility even as you continue to add scale. To that end, here are three crucial cash flow tips for your large-sized staffing firm:
Three Tips for Better Cash Flow for Large-Sized Staffing Firms
Target Your Growth
All additional revenue is tempting. However, even attractive opportunities come with costs. It’s important to weigh your various options before committing to a strategy.
By targeting your efforts in the most profitable areas, you get the most out of your limited resources. Even as you invest, a process that involves committing to increased spending, you can be confident that you’ll see the benefits in increased overall cash flow.
As you review your revenue growth options, here are a few techniques you can use to ensure you get the biggest bang for your buck in terms of cash flow expansion:
- Look at margins: Make sure as much incoming cash as possible stays in your pocket. Targeting higher-margin staffing services will keep your bottom line healthy as you grow.
- Talk to your customers: Learn what services your customers want most. This will let you give you the insights you need to make informed choices about the most cash-flow-friendly growth options.
- Analyze data: Take a quantitative approach to handle your cash flow. The more precise information you can gather, the better prepared you’ll be.
- Don’t chase the competition: Make decisions based on your strengths and your place in the market. Sure, track what the competition does. But don’t let their moves dictate your strategy.
Incremental Productivity Improvements Add Up
A large operation has advantages over its smaller competitors. Leverage these factors to improve your cost structures. This includes getting the most out of your scale, leading to more attractive margins — a move that will let you generate as much cash as possible for your staffing firm.
Meanwhile, get even more out of your operation by looking for productivity improvements. These efforts don’t need to involve massive upgrades. Finding small ways to get more out of your team can add up to meaningful cash flow gains.
Create a Flexible Financial Structure
Protecting your cash flow is as important as expanding it. Over the normal course of business, you’ll experience fluctuations in this key financial measure. On occasion, you’ll even face potential emergency circumstances (like, for example, the onset of a global pandemic) that will create a dangerous blip in your cash situation.
To avoid running into a truly scary situation, you should have processes in place to create a safety net. This way, you can meet routine obligations, like payroll, even if you encounter a temporary cash flow snag. Here are some steps to put in place before you run into an emergency:
- Emergency Cash Reserve
- Line of Credit
- Access to Loans
- Relationships with Potential Investors
- Invoice Factoring
Want to Learn More About Better Cash Flow?
Having strong financial partners makes it easier to build this cash flow flexibility. A top firm, like Frontline Funding, can provide the support and guidance you need to get the most out of your staffing firm.
Contact Frontline today to find out how to maximize your large-sized recruiter.