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Is your biz cash poor? 5 Ways to create cash flow in your jewelry business.

One of the biggest mistakes I made when I started out in business was this: I did not understand the correlation between healthy cash flow and a thriving business.

I didn’t have a problem getting sales in the door, but I often lacked the skill of proper planning for my cash flow needs. These days, I am adamant about running my business primarily on the cash that I bring in the door. I do not use credit for anything because now I understand how dangerous the careless use of credit can be.

Here are a few of the tricks that I use to run my business completely on cash flow:

1. Understand what your cash needs are.

In our Multiply Your Profits course, we talk about the importance of tracking your cash flow, in and out. My former operations manager even created a detailed cash flow tracker so that we could keep track of cash coming in and out of my business. Keeping an accurate record of how much cash you need and when you will need it, will help the most savvy jewelry business owner get her hustle on.

Understanding what you need makes it really easy to hustle and get the money in the door. Using this proactive attitude helped me insure that I was paying myself a salary every 2 weeks. When I knew my cash flow was dependant on my personal income, I made sure the cash was coming in the door.

2. Take a deposit “up front” from your client.

Especially in a custom business model, taking a significant deposit up front will eliminate the issue of not having enough cash to produce an order. The standard for custom work is to take a minimum of 50% up front. This encourages your client to commit, helps you pay for all of your expenses up front and, hopefully, gives you a little cash in your pocket for your design time.

In the case of a wholesale order, certain clients may be willing to offer a deposit up front in order to receive a small, early pay discount and faster delivery or to develop credibility with you.

3. Invoice immediately and follow up consistently.

Invoicing your clients immediately speeds up the cash flow process. If you are shipping an order out on “net terms,” you want to make sure your client has the invoice as soon as your order ships. Often times, emailing an invoice will ensure payment on actual terms rather than your buyers lagging in payment.

Set a day of the week to follow up on your accounts receivables. If you are extending terms on a regular basis, make sure you are following up on a weekly basis with any of your clients that have overdue invoice. DO NOT feel bad or like you are pressuring them by following up. They agreed to pay you in a certain amount of time, so you have the right to follow up.

The same goes for those of you who still insist on consigning your product. You must follow up at least once a month for payment. If you are ready to ditch consignment, we support you.

4. Process credit cards at the time of order or shipment.

A fantastic way to increase your cash flow is to process a credit card at the time your client places an order or at the time it ships depending on the type of purchase. We encourage you to stay away from, for as long as possible, extending credit to your clients. Instead, have them pay up front with their credit card.

There are certain assumptions, especially if you are selling on Etsy or your website, that you obviously get paid up front.

If your clients resist in the case of a wholesale order, just be insistent that it has nothing to do with them. In order to run you business, you need payment on credit card terms. In most cases: all wholesale.

5. Get rid of excess inventory.

Getting stuck in “bright, shiny object” syndrome can be detrimental to a jewelry business owner. I totally had boxes of unused inventory just sitting around like deadweight. Make sure that you are clearing out your old or dead inventory on a regular basis by selling off raw materials or creating pieces of jewelry that can be sold at a sample sale or in the sale section of your website.

Do whatever you can to liquidate your dead inventory, and FAST! Having your precious cash tied up in a box of beads is taking money out of your pretty little pocket.

We want to hear from you! Tell us the following in the comments below::

1. Which cash flow “method” is your favorite?
2. What are you going to do NOW to increase cash flow in your business??


Is your jewelry biz cash poor? Check out these 5 tips to increase your cash http://bit.ly/190NUu2


  1. Lainey cole on June 11, 2013 at 11:13 am

    I have been sitting on inventory because I had no inspiration or vision for them. Many people had told me that I had to constantly keep buying beads even though I had a large collection already…..I know better now! I’m going to deplete what I have before I purchase anything else! Even if I have to make 60 pairs of earrings! Thanks for the tip, it was worth its weight in gold!!!!!!!

  2. Linda on June 11, 2013 at 11:55 am

    I’m starting to put overstock jewelry supplies online and I’m going to plan a sidewalk sale in July. Since taking the Dream Client class, I have a better idea of who I’m creating for and I sure don’t need as many supplies as I have.

    Thanks. Love this post.

  3. Sara on June 11, 2013 at 11:58 am

    This is a great checklist as I transition my business model! I too have boxes of beads and am making quick pieces of jewelry to sell as “clearance” on both my Facebook and Website. I’m not making a ton of profit on them, but it’s taking no time to make the pieces and I’m using up all those beads that taunt me every time I walk in my studio! haha

  4. Erin Prais-Hintz on June 11, 2013 at 12:50 pm

    I pretty much do all of the above, but #5. I am horrible at letting go and getting rid. I even have some places they can go but the time it takes to get them there in the proper format for what they want sometimes deters me. Maybe I just need to have a trunk show or a flash sale on my blog or something. Thanks for the timely tips!
    Enjoy the day!

  5. justine on June 11, 2013 at 1:53 pm

    charging up front has been a priority for a while now and it has been paying off!

    in the beginning it was hard to do but I’m getting better at it and my clients are very used to it too!

    it defenitely changed a lot in my cash flow.

    I also send invoice immediately after the price is agreed.

    Once I took an online course where they told us to take ‘the shortest way to cash’ always, What they mean by that, is doing first what already is bringing in cash. I always keep that in the back of my mind if I’m not sure what to to first.

  6. Lisa on June 11, 2013 at 5:40 pm

    I totally suffer from bright and shiny syndrome. Part of the way I work is to sit down and start playing and I feel like I need a lot of components to realize the design I have in mind(but probably not nearly as much as I have!).
    I’ve been thinking of setting up a supply shop. I also like the idea of sample sales. Thanks!

  7. Laurel Hanson on June 11, 2013 at 6:47 pm

    One thing I recently realized is that I need to make more of what sells fast. I love making necklaces and bracelets, and unusual coordinating earrings. I always sell earrings, so I really need to get more of them in my store.

    Another way I recently increased my cash flow at a show was to reduce the percentage discount I give to my regular customers (from 50% to 30%). They bought just as much as before and I got to keep more of the cash. I also learned to value my work more.

    • Laurel Hanson on June 11, 2013 at 6:49 pm

      I also started selling my extra supplies on Etsy. I need to take more pictures, because jewelry supplies do sell. 🙂

  8. etsy wholesale on July 23, 2013 at 2:51 am

    As soon as I discovered this web site I went on reddit to share some of the love with them.

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