Good cash flow management is essential in every small business if it is to succeed and grow. Our guide includes expert advice and tips to give you the confidence to manage the cash flow in your business.
As any small business owner or adviser will tell you, cash is king. It’s a well-known saying, but what exactly does it mean?
In essence, businesses go bust in the long term through lack of profit, but in the short term, they fail because they don’t have enough cash to pay their bills. Cash flow is the life supply of any business – more firms go under because of cash flow problems than anything else.
The principles of good cash flow management are straightforward. First, you’ve got to make sure you’ve got more money coming in than going out. Money also needs to come in on time, so you can pay suppliers and invest in new stock.
Having access to cash also gives you better buying and negotiating power, which could save you money long term. Anticipating any shortfalls in funds is important, too, as this allows you to make contingency cash flow plans such as extending credit.
Managing money and cash flow is critical for small firms, but you’ll be in a strong position if you can get the basics right.
Our guide offers advice on how to get a clear picture of your cash flow:
- How to stay on top of your cash flow
- Credit control and sales forecasting
- Negotiating good terms with suppliers
- Spotting the warning signs that you might have a cash flow issue
- Increasing sales through customer feedback
- How to boost your profit
- How to ask people for money