Improving Your Small Business Cash Flow

According to an IGF survey, over 38% of small businesses have had problems concerning cash flow. This is not really surprising considering the recession. Cash flow is the lifeblood of small businesses. If problems regarding this factor is severe, it may be the end of your enterprise as you know it.

Efforts to make cash flow substantial for the survival of small businesses are looked into and pursued by small business owners. Let me share some insight I gained from an article I read recently on tips for improving cash flow.

The first is that you should have a forecast of how your cash flow would be like. According to the same article, you need to have an informed forecast. Meaning, you would need to check, study and analyze how you are doing financially at present and then make a forecast of how your business would fare. By doing this, you would have an idea of how your business would be holding up after you have deducted your expenses. There are times when business is slow but your expenses would just be the same or worse, it could increase. By getting a general idea of how your sales is vis-a-vis your expenses, you would know whether it is viable to add more employees (if you need to) or where to cut costs.

Find a software that would work for you. There are a lot of accounting software available in the market. All you need to do is pick one that's tailored to your needs and you would be better able to keep track of invoices, expenses, deliverables and other factors relevant to keeping your cash flow in check. having a reliable accounting software would make the task simpler, thorough and more effective.

Let's say your business had an unexpected increase in sales and you have excess cash. Spend it wisely and in things which would benefit your business in the long run. Since there's no guarantee that you would make the same progress in the coming months, you need to maintain liquidity.

Finally, if you need any help, there are a lot of experts who could give you a helping had. Sure, they would not be able to give you a loan but they would be able to give you options than just tell you to close down your business. Do not wait until you're already in so deep before you ask help. If you think you need to, look for a mentor to help you out. A positive cash flow is not an impossible feat with all the resources available for the small business owner. It's time for you to take charge and be in control.

No comments: