When it comes to cash flow, there’s no time for a Top 10 list! Here are 5 Cash Flow Rules to follow.
Why do you need to concentrate on Cash Flow? Simply put, especially for a small to mid-sized business, cash flow equals life, growth, prosperity . . . and survival.
You need to free yourself to focus your unique talents and abilities on growing your business rather than fighting the constant cash flow fires. Remember . . . you are the only one who really cares about the ongoing viability of your company. It’s your future that you are most concerned about because, if your company is not successful, none of your employees will have a job.
Here are the Top 5 Cash Flow Rules you can implement immediately that will transform the way you manage your business from this point forward. But first, remember the two cardinal rules of managing a business:
Never run out of cash. Make the commitment to do what it takes so that it does not happen to you.
Cash Is King. Cash is what keeps your business alive. Manage it with the attention it deserves. Without cash, you have no business.
Now, the Top 5 Rules . . .
1. Know the cash balance right now. Even the most intelligent and experienced person will fail if they are making business decisions using inaccurate or incomplete cash balances.
2. Do today’s work today. The key to keeping an accurate cash balance in your accounting system is to do today’s work today. When you do this, you will have the numbers you need—when you need them.
3. Either you do the work or have someone else do it. Either you do the work or have someone else do it—those are the only two choices you have. The work must be done. So, either you do it or have someone else do it. (See Rule 3a.)
3a. If you are doing the work of determining the cash balance, you may not have the right people working for you. Unless you are a start-up business without any accounting staff, you must be sure that the financial people know that you need and demand that they focus their efforts on monitoring the cash balance, and keep you aware of what’s happening with your cash.
4. You absolutely, positively must have cash flow projections. Cash flow projections are the key to making wise and profitable business decisions. It’s impossible to run your business properly without them.
5. Eliminate your cash flow worries so you are free to do what you do best—take care of customers and make more money. This is the real key to your success in business. The reason you have to make sure you have the cash flow of your business under control is so you are free to focus all your time and talents where you can make the most difference in your business.
B2B CFO® specializes in helping business owners manage their cash flow. Give me a call at 203-545-6186 for your free Discovery Analysis™ of your business. It’s a call worth making.