Cash flow success

Money, money, money. It's what makes our businesses go around. We all know it, but how many of us treat our business cash flow with the respect it really needs?

According to a recent report from the credit reporting agency Dun & Bradstreet, the cash flow situation has deteriorated in Australia, with more businesses having their risk profile downgraded.

Simply, this means that more of us are having trouble paying our bills on time. We're not capably balancing exactly how much money is coming in and out of our businesses, and being able to pay our debts by the due date.

"It's an important sign that risk remains prevalent and firms must be constantly vigilant," said Dun & Bradstreet CEO, Christine Christian. But how?

Cash flow forecasts are the key, according to Dr Graham Godbee, of the Macquarie Graduate School of Management. He thinks that if you do a cash flow forecast and know your exact cash position at any given time, you'll know when you should be chasing funds, when to pay your bills, or if you can afford to give a customer credit.

In The Small Business Success Guide, I give business owners an Action Item: Cash Flow Forecast Template. There are many of these tools online, but I like this one from the Northern Territory Government because it's a simple one-page version of a cash flow forecast. And the less complicated these things are, the more likely I am to use them. How about you?

Have a look at it, and fill in the blanks. Keeping track of your cash flow is such a vital part of your small business success strategy. So get started on your forecasts, and keep them up to date.

Your business will thank you!

Margie

Small business succession

The David Jones shake-up of last week highlights how important it is for business, big and small, to think about their succession plans.

Who will take the reigns of your business if you decide you've had enough? Surely you haven't put all this effort into your business to simply shut up shop?

While every business is different, and every succession plan is different, it all comes down to planning. Here are some common questions you should ask yourself:

• Who can take over? Do you want a particular staff member to take over? What about someone in your family? Or the kids? Or should you be targeting a competitor to step into your shoes?
• How are my systems and processes? By setting up watertight systems and processes in your business, you have more of saleable commodity. Simply, someone else can easily see how they could do what you do.
• What skills will be needed? Once you've identified someone who could take over the reigns, look at the skills they may need to learn before you leave. And start the training now.
• How will it happen? Set the timetable for the transition to power. Then make sure everyone knows how it will happen and how you will one day phase yourself out of your business.

A smooth succession depends on you answering these four questions. Write down your answers.

It's never too early!

Margie