Don't Take Cash Flow For Granted

Without oil, your car won't run. Without water, your plants will slowly wither away until nothing exists, and without good cash flow, your small business is almost certainly given the same outcome, death.

Yet despite its importance, cash flow is relatively simply to monitor and manage. It comes down to making certain that more cash enters your business than exits your bank account.

The first step toward ensuring a healthy cash flow is converting sales into real money as quickly as possible. That boosts your bottom line, and provides a safeguard against unpleasant surprises such as slow or non-paying customers, and unexpected expenses.

One way to shift cash you way is to ask for all or a portion of a payment upfront. Asking for at least a deposit before you begin work protects both you and your customer. And if you establish the policy fairly and properly, it shouldn't alienate good customers.

Accepting credit card payments also can help speed cash into your account, though it does require a small transaction fee. If you already have a merchant credit card account, encourage customers to use this option more often. Also consider alternative technologies such as Square, Stripe, even PayPal, which allows credit card transactions to be made using smart phones, regardless of where you do business. This technology expedites the flow of cash into your bank account, sometimes as quickly as the next business morning, and adds a welcome measure of convenience for your customers.

A healthy cash flow also requires close attention to your receivables-the money that customers owe you for products or services you've delivered. Create a detailed "aging schedule" of what you are owed, by whom, and for how long. Call overdue accounts, focusing first on the largest amounts due. Don't rely on email unless you feel certain you'll receive a response.

There are many various types of tools and free templates to utilize for projecting, managing, and analyzing cash flow. Several in particular I use often for my business is called PlanGuru, QuickBooks, Float, and Scoro. Check this read out by Mike Michalowics: https://www.americanexpress.com/en-us/business/trends-and-insights/articles/7-cash-flow-management-tools-worth-checking-out/ where he mentions several of the same tools that definitely impact the success of a small business.

Just remember, as a small business owner myself, we can often find ourselves in the rut of focusing on what we don't have and making our focus on getting more in, without realizing what needs to be done. Your top focus should be driving in more sales and in order to do that, you need to be more effective in marketing. Take this time to set your financial goals for your business this year and then outline a deep and thorough plan of how you are going to achieve that kind of success you demand.

Always remember, cash is king and your marketing is your council. Get out there and make some noise and your bank statements will soon reflect that energy and output.

Get Focused. Get Busy. Sprout and Grow. 

P. Simon Mahler, nominated as both an 'Expert' and 'Leader' Influencer in North America for small business, currently volunteers his time for the SCORE organization as part of the "Mentors to America's Small Business," as well as manages a Venture Firm's Start-Up Portfolio. Dedicated to building stronger economies in small communities and helping small businesses succeed through educational entrepreneurship, Simon is committed to the future success of each and every small business in small towns across the country. He is always available to take calls for action and is willing to mentor to any small business out there across the globe. Follow him on the journey of his next endeavor, by starting a business of your own. His daily blog of activities will be posted on LinkedIn for you to enjoy. Find him on social media and connect to get some great ideas to get your business growing!