Taking control of your Cash flow

There are a number of metrics as a business owner for you to consider in the running of your business: revenue, pricing, expenses, profit, but there’s another important piece to knowing your numbers.

Understanding your cash flow.

Cash flowing through your business is like water flowing through a river; if it dries up, the environment around that river dries up and suffers.

You could have sales going through your business, but there’s a timing to cash flow and if that timing is off, it could hand-tie your business, inhibiting growth. If cash is running like that flowing river, then you have enough to fund growth and allow your business the flexibility it needs to operate.

The considerations that go into cash flow are largely around the timing of when money comes and money flows out, and ensuring there’s more coming in than going out.

For money coming in, consider things like:

• How could you shorten your payment terms?

• How could you be more disciplined about collecting payments? (e.g. invoice faster, identify disputes sooner)?

• How could you ask customers to pay a deposit or increase the proportion of the purchase they pay up front?

For money flowing out consider these questions:

• Are there suppliers you currently pay up front that would accept a credit card?

• How could you reduce the amount of inventory you need to carry?

• Is there equipment you buy today that could be borrowed, rented, leased or shared?

If you’ve explored these options and still don’t have the cash flow you’d like in your business, then it could be worthwhile for you to take a look at your pricing, the total number of expenses, and the volume of sales.

Everything is connected. Generally if you see something in your business that isn’t working, it’s because something upstream needs to be adjusted.

If you would like support in diagnosing what’s happening in your business, then let’s speak.

There’s nothing more empowering than knowing what isn’t working in your business so you can put the steps in place to improve it.

NOW is YOUR time.

Ariana