Cash Flow Info for Small Business Owners
Cash flow is a sticky subject for many small business owners. They often wonder where they can get it and how quickly, and once they have it, many business owners are unfortunately able to hold onto it very long. Here are some quick tips to better manage the cash you have coming in so that you end up with more of it and are able to use what you have more wisely.
Look to the Future
It’s important in any business of any size to make sure you know what lies on the horizon. Make sure you’re keeping accurate records of all the money coming in and going out of your business so that you can start making predictions regarding unexpected expenses in your business. Using a balance sheet to calculate how much cash you have and what you have going out in the next few months can help you avoid surprises later on.
Network With Lenders
As with many other things, getting more cash in your business and generating more capital may come down to not what you know but who you know. Start now building relationships with lenders, even if you don’t need financing at the moment. They can help you by leveraging their own networks to get your business growing until you have the techniques and knowledge base necessary to identify possible solutions to cash flow problems.
Start Earning Interest
You’ll be much happier with the cash you do have if it’s growing passively. Put your cash balances in accounts that earn interest such as penalty-free certificates. Avoid putting your money in high interest CD accounts, since this may often result in penalties for drawing money out when you need it.
Save as Much as You Can
One of the simplest things to do to help you build your cash flow is to save money where you can in your business. Require employees to set up a direct deposit with their bank so you can cut back on the costs of cutting checks. Cut back on the office celebrations and try to pay cash for everything in your business rather than acquiring new debt.
Collect on Every Contact
One way to build and manage cash is to collect on every contact. Train your staff in effective collection matters. Make sure you’re invoicing your customers as soon as the service is rendered or product is delivered. Train your personnel to request payment whenever they talk to a customer on the phone or in person. Ideally, your customers will be paying you as they receive your products and services.
Growing your cash flow and being able to manage it over time is an essential part of running a successful business. These tips will help you do both. For financial advice on growing your business and for additional ways to bring in more cash, talk to a finance professional today.