Starting up a business isn’t easy, but with so much to think about cash flow is one thing that can easily put to one side, while you focus on marketing and sales. But with no cash coming in or going out at the right time, you could be left with a huge problem when it comes to continuing to run your business. Which is why I thought I would share with you some of the ways you can control your cash flow as a start up.
Have a decent cash flow reports and money projections
It is vital to ensure that you make cash flow projections for the next year, the next six months, month or even within the next week to ensure that you are fully aware of what your current financial situation is when it comes to your business. As a small business you need to understand the projection isn’t set in stone, but it enables you to make changes or save when possible if you consider that certain times of the year may mean you are shorter on funds than at others. It is important to know what cash you will have, and for it to not be measured on how many sales you might make. It’s more about ensuring that you know where you stand, rather than predicting where you could be.
Improving money coming in
Sometimes you don’t get paid for sales instantly. This tends to be sales made not to the general public purchasing on your website and making a payment straight away, this is normally as a trade sale where you need to offer a thirty-day payment window for invoices to be completed. One initial step is to ensure you invoice correctly and using the Quickbooks invoice template could be a great way to make sure you do everything right and include the right information. Many businesses will then wait until the opportune time for them to pay the invoice.
Be careful with your outgoings
It is just as important to ensure that you are also careful with your outgoings and the invoices that you may need to pay yourself as a business. This means that when you have your outgoings to consider then you need to make the most of the payment obligations you have to your advantage. It might also be a good idea to discuss your business financial situation with creditors so that they are fully aware of when they are likely to receive funds. This extends respect and also helps them to manage the cash flow within their business.
Making sure you survive the shortfall
Finally, you need to ensure that you manage any shortfall you have. A quick way to do this is to go back to the first step and be aware of your cash flow projections. Being aware of the shortfall ahead of time enables you to make sure that you cover expenses due and that you have the time to rectify the shortfall as quickly as possible.
I hope these tips help you to control your cash flow as a start up business.