Your business cash flow is what goes in and out of your business in a given period of time. Managing that flow appropriately can mean the difference between staying in the black and being in the red at the end of the quarter. There are a few simple things that you can do as a business owner that allow you to successfully manage and maintain your business’ cash. Following these hard and fast rules enables you to reap the rewards of running your own operation and fulfilling the needs of your customers.
Plan Ahead
Knowing what you have to pay for regardless of how much money you make that month is crucial to your financial stability. Your employees must get paid, your utility bills have to stay current and you always have to pay taxes. That is money that is going out no matter what your situation, and not paying is not an option. Getting behind on your payments almost certainly keeps you paying more to vendors than to yourself. Losing man power and closing your doors is both demoralizing and crippling, two things that can happen if you don’t plan ahead. Writing out the checks ahead of time is a good way to stay organized, as long as you actually pay when you’re supposed to. Being a step ahead keeps you from having to worry about taking care of even the smallest expense.
What You’re Up Against
Knowing what you’re up against in terms of competition greatly affects your business cash flow. If you overcharge you lose out on customers. If you undersell your goods or services you lose out on valuable profits. A good way to manage your prices is to see what the competition is charging so you understand the market value. If you are selling similar or exact services, the way you market to your customers sets you apart and earns you the revenue you want. Finding new and innovative ways to reach your audience may prove to be the boost you need to put yourself ahead.
Go With the Flow
Having a plan to manage your business cash flow is a lifesaver. Whether it’s writing out checks in advance, knowing which expenses need to be paid and which ones are flexible, or balancing competitive rates against marketing to the right people, a sound strategy will lend you the results you want. Maintaining order and focus is what allows you to generate a steady stream of customers and revenue. It’s a long and arduous process that never goes away, but as long as you stick to the script you ensure your business stays in the black.