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3 ways to manage your cash flow in order to boost your business to success

  • TommyCarey Level X3
    • 11

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    3 ways to manage your cash flow in order to boost your business to success

    We're all trying to make more money online, but do you ever think about managing your cash flow in order to boost your business to even more success?  Many companies fail because they don't talk with their partners about cash flow and how to manage it.  Actually, one of the main reasons for businesses failing is over spending when they should really be saving for a rainy day.  A lot of businesses will spend, spend and spend some more to make their profits go up and up, but they never think about a big mistake setting them back.  If they are constantly spending their money and not saving some of it for rough times, they will go broke shortly after their first big mistake.

    I'm sure some of you are saying "Well I haven't have any big mistakes" and that's good and all, but would you jump a dirt bike 100 feet without having health and life insurance?  If you answered "YES I WOULD!" then you've never had a big financial hit which kills most businesses.  It doesn't matter if you haven't made any big mistakes, yet.  You will make some mistakes along the way and they could all compile which eventually could turn into a big mistake and make you push back deadlines or shut down completely in order to fix everything.

    Here are a few things you should focus on when managing your cash flow


    1. Multiple Revenue Streams
    Some of you may not think that having multiple revenue streams should be in this discussion, but you're wrong.  Increasing your cash flow by diversifying it, means you're setting up a few or a dozen money making websites, systems or businesses in order to keep the main business well financed.  I'm sure you've heard in the past when I talk about have multiple streams just in case one dries up.  If you lose a revenue stream, you can focus on making the others even better.  Never rely on just one stream because it's very risky.

    If you have just one stream, you're putting all of your eggs in one basket.   How many times have you heard "Don't put all your eggs in one basket?"  well it's true, you shouldn't lol.


    2. Talk about your cash flow regularly
    When it comes to running a business, you will need to talk about the money coming in and out with your partners.  If you're not tracking all of this, you won't know what you're actually making and spending.  Eventually you could be spending more than you're making and that means you're slowly killing your business. 

    Things you'll need to monitor and manage:
    1. Incoming cash flow (General)
    2. Outgoing cash flow (General)
    3. Payroll
    4. Advertising budget
    5. Bonuses
    6. Taxes
    7. Benefits

    Sure, you may be small now, but what happens if you get big and have to pay employees and their benefits?  If you're not monitoring and managing all of this, you will go under fairly quick and your business will need to be either sold (if you can) or liquidated.  This basically means you need to sell off whatever you can in order to make enough money in order to get your head above water and out of debt.


    3. Pre-Negotiate payment times
    One of the worst things that can happen when working on a big project is the client not paying on time or not wanting to pay because they think something wasn't done on time or properly.  I reduce this type of risk by simply writing everything in a contract about when the payments will be due.  I don't say "Once we get to stage 2 of the design, you will pay the second bill" because that just means the client has the power to say we're not in stage 2.  I give them a specific date in which I think we'll be ready to move on to the next stage, and that's when the client pays.  I don't risk it by letting them determine how far along they think we are with something because doing that has bit me in the @ss before lol.

    Now you don't have to be a hard @ss about this, you simply let the client know that you have pre-set dates on when they should be paying for your services.  You will set the dates a few days, weeks or months after when you think the work will actually be done just to ensure you will have everything ahead of schedule when payment is due.  This little trick makes the client more than happy to pay up because you're working quicker than anticipated, even though you anticipated being done earlier but put a later date just to play it safe 3 ways to manage your cash flow in order to boost your business to success


    In Conclusion:
    Increase the amount of revenue streams you have, but don't make them all at once.  Work on one and get it profitable, then start on another one while still boosting the first.  By the time the first one is plateauing, you will have a few streams up and running that you're trying to build up.  The first stream can then fund the next few and eventually you will have a profit machine doing the work while you manage everything.  You'll also need manage your cash flow so you know for sure you're not over spending and that you're safe if something does go really wrong.  Pre-negotiating your payment times is something you should really focus on and get it right the first time.  It's super annoying when a client doesn't want to pay because they think your work isn't at the stage you think it's at.  Just remember, the client IS NOT always right lol.


    Remember to follow me!
    https://www.seoclerks.com/user/Razzy


    Thanks!

    Razzy

    #Business Marketing & Monetization
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    JoeMilford

    JoeMilford

    These are great suggestions for ANY business if you ask me. It is absolutely a must to keep up with all revenue and to also be smart about what your profit and loss margin is and what you can smartly and safely reinvest back into your business or businesses. I like the idea of creating a "profit machine", as you call it. Having all of these things working for you out there and bringing in revenue IS running your own conglomerate, and sometimes you are the one producing the content, being the accountant, and managing all of the revenue sources; hopefully nothing serious happens to the point where you have to fire yourself as a one-man or one-woman business, lol.
    9 years ago

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    DarthHazard

    DarthHazard

    Cash flow is one of the most important things for your business. You need to make sure that you know what is coming into the business in terms of revenue and what is going out in terms of costs. If you are careful and keep an eye on your cash flow at all time, it can help you to maximise profit as much as possible and helps you to avoid any unexpected issues.
    9 years ago

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    Corzhens

    Corzhens

    Maximizing profit with good management of cash flow means you are not borrowing money from a lender that charges interest. I had experienced that problem when I had neglected monitoring the cash flow. There came a day when we had no more cash for buying supplies and paying the suppliers of our balances on credit purchases. Perhaps if we had a huge capital then my business would have succeeded.
    8 years ago

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    DarthHazard

    DarthHazard

    I'm very sorry to hear that. Have you ever thought about giving that particular business another try? I'm sure that you have learned from some of the mistakes you made which may mean you can make it a success on your second try.
    8 years ago

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    augusta

    augusta

    Good post.I think the most important for the success of one's business life is having multiple streams of income.One source is not good enough no matter the amount one is making, because anything can happen to that one source and that spells doom.

    Another thing is to really monitor your income and spending.Do not allow your spending outweigh your income.you will be setting yourself up for poverty.
    9 years ago

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    overcast

    overcast

    I think diversification is really important. I was active on freelancer and fiverr. And I have noticed that some of the niches do dry out. And that is the way you find out how the business gets out of the business with such platforms. So I think having multiple cash flow needs to be considered. And people need to fix that part there as well. So I think the cashflow options need to be increased for things to go well as well.

    You can see that boosting cash flow is not easy. You have to work harder with getting more leads. And that is one way to fix the business these days. You have to keep bringing new clients to get more cash flow and customers in order.

    You have listed some good points there.
    9 years ago

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    Pixie06

    Pixie06

    Cash flow is definitely important. If you don't plan your business well then there is a high probability that you will fail. Diversification is equally important. This will ensure your long time survival. I currently have an online business and I sell standardized products. I know that I must think about the future as customers preferences keep on changing. However, it is not really that easy to develop new products. It is time consuming and costly.
    9 years ago

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    Henrywrites

    Henrywrites

    This is really the way that my boss has done it all these years and that has made him stay in business all these while. He does not joke with how the cash flow works and always take a critical look at every expense list before approving any and he does not listen to murmurs by people that he is stingy. He also ensures that he sets out a payment plan for good that we buy from our suppliers so that we don't have issues with any supplier coming to embarrass anyone at the firm. Amazing points you've made above.
    9 years ago

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    vinaya

    vinaya

    I cannot agree more with your three points. First and foremost thing to boost your business is generating multiple revenue streams. I have a dairy farm and selling milk is my main revenue. However, in order to boost the business, I am also trying to create another revenue stream such as selling compost (cattle dung makes a good compost). You should also track your income and expenditure to boost your business. I record my entire income and expenses. This helps me to boost sales and cut expenses.
    When you are getting paid is also important. I have a bank loan and if I don't get payment in time, I will not be able to do repayments.
    9 years ago

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    kgord

    kgord

    Yes, I mean without cash flow your business is not going to be able to sustain itself. It is really important for your business to succeed and thrive. It is simply one of the ways you can stay in business. Tracking where the money goes is one of the most important things you can do. It is critically important.
    9 years ago

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    Corzhens

    Corzhens

    Monitoring the cash flow is very important for a business because it is your medium with your stocks and supplies. If you have no money for the overhead then that means you have to borrow so the operation can continue. And when you cannot get more funds, that’s the time you have to declare bankruptcy. It’s sad to recall that I had 2 failed attempts at business and the cash flow did me in. I was paying more for the interest of my loans that my profit would just be eaten by that.
    8 years ago

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