Thursday, 15 November 2018
Cashflow tips for small businesses
With seven out of ten small business owners citing cashflow problems as the main threat to their business, tips for ensuring a healthy cash flow could be the most important thing you read in the early years of business. Particularly for start-ups, experience shows that if you can’t manage your cash flow effectively in your first couple of years, it is unlikely you will survive.
So, what does cashflow mean? It is exactly what it says on the tin, it’s when the cash flows in and out of your business bank account. Keeping on top of your income and outgoings is vital and when developing a new business, preparing a cash flow forecast should be one of the first things you do. Estimate when you will need to pay bills and when you will be paid by your customers and have a plan B if your income doesn’t arrive precisely when you expect it to. Monitor that cashflow forecast regularly, it’s a working document and must be kept up to date as sales (income) and costs (outgoings) change – and they will!Back