How to maintain a healthy cash flow

Did you know, you can have a profitable business and still go broke? Cash flow is the lifeblood of any business. To maintain a healthy cash flow, you need more than strong revenue. You must be comfortable and confident in how you handle cash to achieve financial growth.

Here are a few quick questions for you:

  • What is the ‘Number One’ driver of profit in your business?
  • Does your business model have you getting paid upfront or after you have done the job?
  • Do you know what your Average Receivables days are and how much money you are owed?
  • Do you know how much Inventory or Work in Progress you have locked up, in both dollars and days?
  • Are you happy with the profit you make out of your small business?

Managing the cash flow in your business is critical. It can be the difference between having a successful business and one that needs to close its doors.

We’re all in business to make a profit. The key is to create reliable revenue and predictable profit that grows despite what the economy is doing.

Outlining a cash flow forecast will help you identify cash availability and shortages so you can plan ahead.

Here are the areas of business that can impact cash flow:

  • Sales Growth
  • Pricing
  • Gross Margin & Inventory
  • Accounts Receivable
  • Operating Expenses & Staffing Costs
  • Capital Expenses
  • Debt & Funding.

Just knowing these seven levers of cash flow won’t create change – you need to know how to pull these levers at the right times to create positive cash flow.

To learn how to improve your business across the four pillars of Strategy, Cash, Capacity and Clients – register for The Business Bootcamp.

The Business Bootcamp is a program designed to help you take control of your business right now – giving you the opportunity to set yourself up for immediate and future success.

Find out more here.

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