Let’s get one thing straight — your business can’t survive without a consistent stream of cash. Cash is the lifeblood of your organization that funds day-to-day operations and strategic investment. Whether it is the regular cadence of payroll, bills from vendors, or creating new innovation to reinvest in your business, keeping your business flush with cash is mission-critical.
Running a successful business is challenging, but unexpected cash problems should not be one of those challenges! Just like marketing, strategy, and a great product/service, all require discipline, so does the responsible management of cash to continue to drive profit. Great stewardship is an absolute must!
Key actions to take to manage your cashflow
Make frequent cash flow projections.
Just like you manage other statistics, you have the opportunity to take charge and keep track of your financial data. When you analyze your fiscal data and make projections based on this information, it’s easier to make accurate predictions about the future of your business.
This isn’t all about luck and guesswork, either. Look at your financial analytics, and you’ll know the likelihood of future failure — but also future success.
Put yourself up in a watchtower so you can see trouble coming way ahead of time. Look out beyond today or next month; evaluate at least twelve (12) months ahead. With this foresight, you can anticipate one-time events, seasonality, or other scenarios that dictate action for today.
By establishing controls, you ensure you don’t get in a bad spot. By planning ahead, you avoid crises and unexpected results.
Track your money very closely.
This involves more than just an Accounting 101, balance sheets, or some computer software that does all of your math for you. You’ll likely need professional help and guidance to both handle your bookkeeping and advise you on future projections.
Should you obsess over your cash flow and cash position? ABSOLUTELY…