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7 Stress Saving Strategies for Beating the Small Business Cash Flow Blues
Small business owners can relieve a lot of their own cash flow
problems, according to Caroline Jordan, small business advisor
and author. "Small business owners have more control over their
cash flow than they realize." says Jordan.
To help you get a jumpstart on solving your own cash flow woes,
Jordan offers a free, "Cash Flow Master checklist" that you can
get by sending a blank email to
TheJordanResult-110571@autocontactor.com. Jordan also suggests
the following tips to help you understand why cash flow problems
plague 66% of small businesses.
1. Avoid the dreaded "Fly by the Seat of Your Pants" accounting
method.--Businesses need to systematically track income,
expenses, accounts receivable, and accounts payable. If you only
know how your business is doing once a year at tax time, you're
bound to end up deeply mired in the Cash Flow Swamp.
2. Developing "Strength in Numbers"--Once you have your
accounting system in place you need to learn what the numbers
are telling you and how to use those numbers to manage and grow
your business.
3. Keep tight control of credit--Business owners can get
themselves in credit trouble two different ways; poor credit
granting practices and shortsighted use of credit from banks,
credit cards, and vendors.
4. Be sure your Receivables and Payables "play nice"
together--The money owed to you by your customers should arrive
in time for you to pay your vendors and your employees. When
your customers take 60 days to pay and your vendors want to be
paid in 30
days, you can quickly end up with a Cash Flow Crunch.
5. Make decisions based on Cash Flow not Profit--Many businesses
that fail are profitable when the doors close. What those
businesses don't have is CASH. When you pursue that big, juicy
contract or think about hiring another employee, always ask
yourself "What will this do to my cash flow?"
6. Don't forget your debt to society-- Some bills are easy to
forget. Bills like sales tax, payroll taxes, and estimated
taxes. Ignoring them doesn't make them go away. Planning ahead
makes the bite easier to take and keeps your from suffering Tax
Day sticker shock. Scrambling to find money for taxes causes
major cash flow problems.
7. Don't spend your company's future on a speed boat--Everybody
loves toys. Don't make the mistake of thinking all the profits
of your business are "fun money". You've heard it many times
from personal financial planners that you should have enough
cash put aside for six months of expenses. This is true for your
business, too. Sales ebb and flow. Expenses rise. Customers
leave. Vehicles break down. Computers fry. The number one rule
of small business is "Stuff Happens". Having a reserve of cash
keeps your cash flow from tanking every time a new challenge
appears.
About the author:
Caroline Jordan, MBA helps self employed professionals build
successful businesses, attract clients they enjoy working with,
improve cash flow, and develop additional sources of revenue. To
find out how visit: http://www.TheJordanResult.com
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