Let’s talk about Money.
The reason we all started our business, is to make money right?
There are many other reasons for sure, but in reality, if our business does not make money, it won’t last long!
So let’s talk about Cash Flow.
Cash flow is the movement of money in and out of your business. Managing your cash flow is one of the most crucial aspects of running your business. Positive cash flow means that your business has enough money to pay the bills, stash some savings and invest in growth opportunities.
Maintaining that positive cash flow thought, can be a challenge for many small businesses, especially during uncertain economic times, like we are seeing here in Australia right now, where we recently had our tenth interest rate increase! The flow on effect from this is a squeeze on the average household budget and potentially a reduced cash flow in your business.
In this blog, I will explore three easy strategies that you can use to manage your cash flow more effectively:
- Create a Cash Flow Forecast
The first step in effectively managing your cash flow is to create a Cash Flow Forecast. This means writing down all of the expected income and outgoings for a given period of time – usually a month or a quarter. You should include any anticipated sales and ongoing expenses, as well as any outstanding payments from your customer and suppliers. By having a clear understanding of your cash flow, you can plan ahead and make informed decisions about your business’ financial needs.
- Monitor your Accounts Receivable
Accounts receivable is the money owed to your business by the customer who have not yet paid for your goods or services. Make sure that you send invoices every week – the sooner your customers have their invoices, the sooner they can pay them. Check your debtors list every week – late payments can significantly impact your cash flow. It is important to have clear payment terms that your customers agree to, and that you follow up quickly on any overdue payments.
- Keep Track of Your Expenses
Small expenses can add up really quickly and affect your cash flow in a negative way. A great way to check these expenses is to print out your bank statement from last month and highlight all your outgoings – what are necessary and what can you do without? You might be surprised how much you can save each month by making small changes to your spending habits.
By implementing these three simple strategies, you can maintain a positive cash flow, reduce your stress levels and position your business for growth.
Remember too, that managing cash flow is an ongoing process, so make this part of your weekly routine and be sure to review and adjust your strategies as necessary to meet the changing needs of your business.
Fresh Business Solutions is available to assist you!
Click here to arrange a FREE, no-obligation 45-minute discovery meeting with me, during which we will examine your company’s current situation and discuss how we can work together to help you overcome the challenges of entrepreneurship, grow your business, and achieve your goals!
Remember always, Keep smiling!
