If you are the proud owner of a small business but are having trouble regulating your cash flow, then you’re in good company. Cashflow is, after all, the main priority of any business, no matter how small or large it may be, and without a good understanding of where the money is going, it’s quite hard to make decisions or predict where the enterprise is heading.
It’s essential to ask questions. What does the entrepreneur spend money on – and why? – and how can the revenues be increased? Here’s your all-important guide to cash flow management for your business.
Make a model
If you have a business, then you should have a good idea of where the money is coming from, and where it is going. Write this down in the form of a diagram and make a hypothetical model. You may discover that a lot of money is coming in or going out to unexpected places. The diagram will help you picture your business model and clarify some things.
Understand your system
Once you’ve got your diagram, you should be able to notice some areas of challenge and some opportunities for more profit. Understanding your system will allow you to solve problems in a more objective way.
Check your amounts – of both expenses and income – and see if you can improve these. Set targets. Make sure that your goals are realistic (and that they are measurable). Write your goals down, and be specific.
Don’t delay. Make that invoice as soon as possible, and send it off as soon as possible.
After a few months of listing everything down, you should be able to see patterns – and this allows you to project into the future. Mind you: it’s just a projection, so don’t count on it. Have emergency plans ready.
Use technology to your advantage
There are many great computer programmes that can help you accomplish your goals. Avail of the software and technology that is available. They’ll save you lots of time and money in the long run.
There are two more important things that should be mentioned. The first is a piece of wisdom from the successful entrepreneurs: don’t focus on the profit at the end of the month; rather, focus on the cash flow. If your cash flow is in order, all else will follow in time. The second piece of wisdom is simply this: get a professional to straighten out your books. Professional services such as those provided by the accountants in central London from Griffin, Stone, Moscrop & Co. are not as expensive as you may think and can save you lots of money when it comes to taxes. They also provide invaluable advice, which will lead to faster growth and greater opportunities. Do it right, and take care of your cash flow.