The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it.

Debbi Fields, Author

When cashflow is not good enough ?

For retail companies, the months just before the holidays are a time when cash flow can be particularly tight. You need more inventory from your suppliers to prepare for an influx of sales, but if those supplier payments come due before your sales actually happen, you may have trouble paying bills on time.

Using a cash-flow statement will help you track your inflow of revenue and outflow of expenses during a specific time period. This will help you anticipate when you’ll have more money going out than coming in, so you can plan ahead for those difficult periods. Without one, you’re just guessing at whether you’ll have the money you need when you need it, and you’ll increase your chances of facing late payments and other penalties on past due invoices.

Most common Cashflow problems?

  • Overestimating future sales volumes. Relentless optimism is a key trait of successful entrepreneurs.
  • Engaging in impulse spending during the startup phase.
  • Being passive about past-due receivables.
  • Not using a cash-flow budget.
  • Not keeping a cushion of cash on hand.

I make a conscious effort to keep things in perspective when I get burned out. It is easy to get stuck in the daily grind, but if you think about all the distance you have covered, and what lies ahead, it is much easier to feel motivated and optimistic.

Alex Litoff, Event Farm

Even though you are running a business, you would still need some money for your own personal upkeep. So you need to determine exactly how much this is so that you know what you have left for the business. The next step is to subtract all the expenses for your business such as rent and salaries.

When you have all of these figures, then you would know exactly what you have to work with. In addition, since you are already quite established, you should set some cash aside as emergency savings just in case some situation that would affect cash flow pops up.

  • Keep Up With Your Invoices
  • Study Your Own Cash Flow Pattern
  • Set timely payment polices
  • Monitor the results
  • Create a budget

Business owners should sit down to thoughtfully estimate expected cash inflows and outflows. Factors that to consider include the sales cycle, terms and discounts provided customers, industry delinquency rates and other factors that may affect the timing of incoming cash.

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