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
Showing posts with label small business cash flow. Show all posts
Showing posts with label small business cash flow. Show all posts
Monday, June 21, 2010
Tuesday, May 11, 2010
Kickstarting your cashflow with that extra 2%
Great news in last night's Budget that in 2012 small business will benefit from a reduction in their company tax rate.
The hope is that the drop in rate from 30% to 28% will give you some extra funds to throw back in to your business.
After all, cash flow is probably one of the biggest stresses of owning a small business.
So how can you best use that 2% for a cash flow boost?
In The Small Business Success Guide I outline the best ways. Here are a couple of tips:
* First, do a cash flow forecast. Dr Graham Godbee of the Macquarie Graduate School of Management, who I interviewed for this chapter in my book, is a big believer in these forecasts. Simply, they look at how much cash your business has access to (now and in the future) and then how much cash it takes to keep your business operating on a daily or weekly basis (wages, rent, consumables and utilities, both now and in the future). Make your forecasts as accurate as possible, by taking into consideration what would happen if your sales increase, or you buy new equipment, or if your costs rise.
* Once you've done this forecasting, you'll have an accurate picture of how your business sits in terms of its cash flow, both now and in 2012 when you get that extra 2%. Then you'll be able to accurately work out when will be the most effective time in your business cycle to make the most of it.
Don't waste the opportunity that this extra cash will give your business.
You've got time to plan it wisely.
Margie
The hope is that the drop in rate from 30% to 28% will give you some extra funds to throw back in to your business.
After all, cash flow is probably one of the biggest stresses of owning a small business.
So how can you best use that 2% for a cash flow boost?
In The Small Business Success Guide I outline the best ways. Here are a couple of tips:
* First, do a cash flow forecast. Dr Graham Godbee of the Macquarie Graduate School of Management, who I interviewed for this chapter in my book, is a big believer in these forecasts. Simply, they look at how much cash your business has access to (now and in the future) and then how much cash it takes to keep your business operating on a daily or weekly basis (wages, rent, consumables and utilities, both now and in the future). Make your forecasts as accurate as possible, by taking into consideration what would happen if your sales increase, or you buy new equipment, or if your costs rise.
* Once you've done this forecasting, you'll have an accurate picture of how your business sits in terms of its cash flow, both now and in 2012 when you get that extra 2%. Then you'll be able to accurately work out when will be the most effective time in your business cycle to make the most of it.
Don't waste the opportunity that this extra cash will give your business.
You've got time to plan it wisely.
Margie
Subscribe to:
Posts (Atom)
