This probably comes at no surprise but cashflow is huge. It’s vital for a business of any size but small businesses in particular rely on it heavily. Larger companies sometimes have more resources, assets, etc. that can be leveraged when cash flow is tight. It’s just not the case for many startups and small businesses. Those managing a business should consider the contents of this blog post as a guide to cash flow management principles.
Keep a Budget
There are a lot of helpful resources on managing a small business budget out there. Some people rely heavily on their own Microsoft Excel sheet. Whatever system you adopt, stick to it. Be diligent, be consistent.
Retail companies both traditional brick-and-mortar style and ecommerce companies need to watch their inventory closely and be able to wisely forecast expenses and be able to plan for them accordingly. In every type of business this is true in some way shape or form. Don’t just let your finances happen to you, be prepared.
Manage Liabilities Closely and Evaluate the Frequently
Nothing can kill cash flow faster than having your money tied up in silly recurring expenses. As you are looking at the things you are investing in, ask yourself is this truly saving me time? Is this truly helping me accomplish my goals? If I were to eliminate this expense today, would my company suffer next month? Next year?
Many startups operate out of garages and spare bedrooms as to avoid the large amount of overhead often associated with retail or office space.
Watch Your Bank Account Closely
Did something come out? Do you know what that expense was? If not, get to the bottom of it. Little things here and there can add up quickly. Don’t let yourself become too casual about your finances. Casualty creates casualties is a little dramatic but it has some truth to it.
Managing the finances of your business is important. Follow some of these principles and you can make it happen! Best of luck in your business endeavors!