How to Counteract a Negative Cash Flow

I‘m always on the lookout for articles with the potential to positively change a business. What’s your take on the following points I came across recently?

A negative cash flow can send your small business into a quick spiral of financial disaster. Since a negative cash flow is indicative of a business that spends more than it brings in, you’ll have to stop excess spending or increase sales or both. Once you counteract your negative cash flow, steps must be taken to ensure that a positive cash flow remains and that your business’s financial outlook stays healthy.

Analyze your expenses and slash costs as much as possible. Unnecessary expenses can wreak havoc on your cash flow. Almost every small business owner will find that he can scale back at least a portion of his expenses. For example, you may be able to cut utility costs by shutting off the office computers each night or lower labor expenses by sending employees home when they’re not needed.

Create a strategy to increase revenue. If cutting expenses isn’t enough to counteract your negative cash flow, you’ll have to devise a plan to bring in more revenue. Examples of increasing revenue include training your sales force to utilize better sales strategies, using different advertising markets, targeting a wider range of consumers and investing more into a product at the beginning of its life cycle.

I’d be really interested to know your opinion. Check out the full article here and then I’d be happy to discuss with you by phone (0406) 534-233 or email [email protected].

Thanks,

Chris