Money makes the world go round and cash flow keeps your business running. If you own your own business or work for someone else it is important to be aware of the cash flow. Although they may not be the most fun part of your job, budgeting and collecting the dollars are key to having a successful business.
These useful tips can help you keep your business alive. Find out exactly what you need to do in order to keep your business going, and out of financial problems.
1. Make Cash Flow Your Number One Priority with Cash Flow Analysis
Cash flow is what keeps your business going, and when things go slow this can be the first thing to suffer. Cash flow is the most important thing in determining whether your business will succeed or fail. Therefore, you should develop a plan for your cash flow. Develop a budget for your cash flow that records the amount of money that flows in and out of your business. This will allow you to predict the available cash for a given time frame. Also it is important that you understand the difference between cash flow and profit. Cash flow is meant to cover your business's day-to-day expenses. Profit on the other hand is used to pay back debt and support long-term growth.
2. Consider Banking In One Place
If your business is banking with more than one bank you may be missing out on great benefits. Banking at one bank helps your business create a relationship with a bank, and your commitment to one bank can be rewarded. Find a suitable bank that can offer you benefits for your commitment and ask them to take a look at your banking. Hopefully you will gain benefits in return for your complete banking business.
3. Get Business Insurance
Business insurance is important for any business big or small. This can help you from unexpected events, fires, floods or robberies, which is the last thing you need especially in this economy. Business insurance can help maintain your usual cash flow levels to help smooth out troublesome scenarios that can be costly. Consider all the different insurance options and find the best one for your business.
4. Never Stop Promoting Your Business
When times are hard your business could be facing lower sales. This is when having a point of difference can help your business. Find something that you do best, or something that you offer that others don't. Use advertising, marketing and word of mouth to find any way to communicate what sets you apart from other businesses. Be careful not to waste money on useless advertising, and test the effectiveness of different marketing techniques before you put a lot of money investing in one. Also take advantage of any free marketing advice you can get from reliable sources such as personal recommendations from business associates.
5. Make Customer Service A Priority
The most important people to your business are your customers. If you want to keep customers coming back you should treat them with the best customer service possible. Happy customers will keep coming back and will tell other people about your business. Great service can lead to the best form of advertising, word of mouth. Make sure customers know they are important and offer 'extras' to loyal customers.
6. Work Smarter, Not Harder
Make sure you take advantage of time-saving products and services that can help you stay up to date with your business. Use payroll services, super tools, transaction and savings accounts. These tools can save time and create more time for focusing on what's really important for your business.
7. Understand Your Costs And Control Them
Although cutting costs during an economic crisis is important make sure you understand your costs before making a move to cut them. Take the time to know the true costs and profitability of everything you do from services, products and customers. Also you don't want to overload your business with a bunch of assets that won't increase your revenue. Focus on the assets that will increase revenue. When looking to purchase an asset make sure you honestly answer to yourself questions such as "where's the money coming in from this - how much and how often?". The answers might be different to what you want them to be so be sure you know what's happening with your money.
8. Learn From The Experts
Don't hesitate in getting advice from the experts that can keep you up to date with the latest economic thinking. Develop relationships with people who know what is going on with the economy and can help you. Start with your banker, lawyer, financial planner, and your accountant. Having all of these people on your side and on the best terms can help you keep your business on beat. It can also mean changing who your advisers are to suit different phases of your business cycle so get recommendations from business owners you trust and respect.
9. Confront Potential Problems Early
No one wants to admit that they may be heading for financial problems. However, if you do know that this is where you are heading it is important to confront the problem right away so the problem can become more of a challenge that brings opportunity and growth. Also, remember it is easier to turn your business around than to save it once you have already hit rock bottom.
10. Stick To Your Budget
Making a budget and sticking to it is important for any business. Your budget can help manage your cash flow and help you know when you will have money available for bigger purchases. However, a budget is useless unless you stick to it. Make sure you are keeping an eye on your budget any time you are making a purchase.
11. Collect Payment Efficiently
It is extremely important that you collect payment efficiently and in a timely manner in order to keep your business alive. Not receiving payments could cause problems for your budget, so do whatever you can to insure payments on time. Send payment reminders close to the end of the payment time and begin chasing payments as soon as they are overdue. Get those invoices paid.
12. Consider Getting An Expert
If you are having trouble with, or feel unsure about your cash flow consider getting an expert to help. A financial advisor, accountant or bookkeeper are all great resources to go to for help. They can help you run financial reports each week so you know exactly how your business is doing.
Finding Information Online
If you're looking around at the different banks and insurance agencies be such to ask your business associates both online and offline. Business forums such as Flying Solo are great for getting questions answered such as what to look out for in a business insurance policy, personal recommendations for professional service providers, tips on best business practices as well as advice on what to look for in banking products and a whole heap more.
Your local business chamber of commerce is also another great resource for local knowledge and advice as it's made up of business owners from your own area but from a wide range of industries.
Strong Cash Flow
Staying on top of your finances is important so remember to keep these in mind when dealing with your business. Your business will be booming in no time with the help of these top tips for a strong cash flow!