As a new business owner, you may face lots of challenges on how to manage your cash flow. That’s normal and it shouldn’t make you give up. Instead, you should up your game with these cash flow management tips.
1) Anticipate Your Future Needs
As a new business owner, you should avoid surprises. Make sure you’re able to determine most of your plans in advance. In fact, there is nothing as difficult as looking for cash when it is too late. This will only make you frustrated and think that the business isn’t meant for you. Instead of thinking that the industry isn’t meant for you, organize your financial records. The financial records will help you to understand what you’ll require in the future. Never do your tasks in a last-minute rush.
2) Build Connections with Lenders
It is important to note that companies are not interested in lending to a company that’s not doing well. So, it’s better to build connections with lending companies early on and not when you’re stranded and need cash. To win and build connections with lending companies, it is better to have assets as a company that the lending companies can sell to get their money. This way, you will attract most lending companies. This can only be done by making sure you keep track of your sales using your financial records. If you’re serious about managing your business cashflow, then you shouldn’t ignore this point.
3) Keep Your Cash Working
Keeping your cash working in this case means, you deposit your sales in a bank so that it can earn some interest. Interest rates differ from bank to bank. It’s wise to deposit your cash in accounts with the highest interest rates and not the lower interest rate accounts. Make sure to avoid long certificates of deposit as this may restrict you from redeeming your cash; Redeeming your capital before the time required can cost you your rightful interest and that’s not what you want.
4) Train Your Customers
Some new business owners think that payment on delivery is a better option for receiving payment when the reality is that it’s nearly impossible. Most customers do not pay before a product is delivered. So, it’s better to train your customers on “payment is expected on invoice receipt”. This will allow you to penalize any customer who doesn’t pay within 30 days.
5) Accept All Forms of Payment
Most customers prefer certain payment options over others. So, if you close doors for them, they may not purchase from your business. Wire transfers, checks, credit cards, Apple Pay, Samsung Pay and Venmo are forms of payment you can accept.
6) Review Your Financial Statements Monthly
Many businesses tend to neglect reviewing their financial statements monthly. As a new business owner, this should be one of your priorities. Don’t be among those who fail to review their financial statements. The smart route is to employ an accountant to prepare and manage your financial record-keeping.
7) Invest in Your Personal Development
Most people assume they are gurus. To grow your business, you need to invest in business courses that will steer you towards growing your business like wildfire. Sharpen your skills so you can be confident in the niche you partake in.
Final Thoughts
Managing your cash flow won’t be a nightmare if you do it right. Most businesspeople omit some of the important steps and end up running losses. Instead, implement the seven steps above and you’ll succeed with your business.
