Cashflow refers to the money going in and out of your business.
As long as you have enough money coming in to pay your expenses – and that includes paying yourself –your business can grow.
To manage Cashflow to your advantage:
- Make more sales and collect on them promptly.
- Control expenses.
Do these two things well, and profits will follow.
Drive Sales
Sales should be the main source of revenue for your business. But making a sale is not the same as collecting the money from the sale. Here are some tips to get the cash into your business.
- Require cash on delivery.
- Require a deposit if delivery is not made upon the confirmation of sale.
- Offer an early payment discount.
- Invoice as soon as the sale is made.
- Act on overdue accounts quickly with a policy that respects and keeps the customer.
Control Expenses
Expenses deplete your company’s cash. As my mother told me, a penny saved is a penny earned. Control expenses with these tips:
- Avoid purchases
- use your client’s tools or borrow tools from friends or the Tool Lending Library
- have your customers provide the cleaning products they want used in their home
- Go with your customer to select and pay for flowers that you arrange.
- Compare prices to buy smart
Keep revenue flowing in and control your money going out and you not only have great cashflow, but you will also build more quickly towards a profit.
