Cash flow and cash flow management for small to medium-sized businesses is always a timely subject because â€œcash is kingâ€ and is essentially the air or lifeline of businesses that have limited means of raising capital. With a limited or worse, non-existent flow of cash into the business and large outflows of cash, the business is unsustainable.
Below are 10 ways to keep your cash flow healthy and sustainable.
1. Always be aware of how much cash is in your account.
2. Monitor and deduct cash from the amount in your account if a check or payment by other means is in transit between you and the recipient.
3. Determine and monitor how much it costs to keep your business running each month. Also, keep track of these costs by mapping them out on a calendar.
4. Never assume to be paid when you think you will be. Always add a â€œbufferâ€ time of at least 14 days following the due date of a payment.
5. Take advantage of free marketing opportunities. A perfect example would be like the space offered to members in the Quarterly Newsletter.
6. If you find that you must borrow funds. It might be best to develop a personal relationship with the individual who decides on your file.
7. Stretch your money to build your business. Essentially, make the most out of what you can afford to spend. If youâ€™re a member of X2 Elite, utilize the tools and benefits that come with membership like the Weekly Bulletin, social media, and X2 Quarterly Newsletter as well as our X2 Media design services.
8. Use client money to build your business whenever possible.
9. Donâ€™t rely on balance sheets and income statements. Keep track of the tangible and donâ€™t base all of your operations on figures using amounts that are not actually available to you immediately.
10. Cash flows are like tidewaters. Sometimes the tide is out, but it is not a time for panic because the tide will come back in. By having proper cash flow management, your business will be able to weather the low tides and take advantage of the high tide. However, keep in mind that there will be forces out of your control that might extend the low tide period well beyond your expected timeline.