Cash. Most people want more. When running a small business it’s particularly important to monitor how cash is coming in and how much cash is going out. This month, I’d like to take a few minutes to share some ideas on cash flow management as in how you can keep more cash in your business for a longer time. 1) Periodically re-evaluate your expenses. If you are anything like me your business changes and shifts every 4-6 months and this prompts a necessary re-evaluation of the products and services you are using to run your business. Where can you save money?
For some people, this may mean canceling out on certain business expenses that they never fully utilize, or, it may mean hiring out and getting help with some tasks on which you normally spend your own time. Both examples are aspects of improved cash flow management even though one (hiring out) involves spending more money. If you can hire out work at less than your hourly or salary rate you’re improving your cash flow because you’re creating more space to make more money. 2) Hold off on electronics and other purchases for as long as reasonably possible.
If you need to invest in a new computer or printer or copier you can save money without sacrificing quality if you can wait a few months to purchase. 3) Use credit responsibly. If you have access to lines of credit you can use these to finance business purchases rather than paying cash outright. This, in many cases, can give you 20-30 extra days on your money enabling you to save or invest it for maximum return. 4) Watch out for hidden fees.
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