Cash flow is the lifeblood of any company, it is the oxygen to let businesses breathe, but for business owners it really can be make or break. Managed badly, it can drive a promising venture into the ground rapidly; managed well, it can help you grow your business at a controlled rate.
Maintaining your cash flow means looking ahead to spot problems before they have a chance to damage your company, and making sure you’re always preparing for the worse. But it’s not all doom and gloom: an intricate knowledge of your cash flow means you can analyse patterns to help you understand what isn’t working in your business, how to change it and, crucially, how to seize opportunities for growth.
Exciting developments in financial technology are giving rise to a wave of new tools for small business owners to visualise and quickly respond to these opportunities. Figures released last month suggest that business owners cash flow bounced back to pre-crash levels in 2014, but many smaller businesses continue to battle with onerous payment terms placed on them by larger firms and institutions.
Despite EU and UK government rules designed to hold organisation’s to 30 or 60 day terms, in practice, small businesses often resort to measures that see them lose money on their invoices rather than wait it out – meaning that many of the proposed “solutions” actually perpetuate the problem, by rewarding large-scale customers for dragging their heels. As political parties prepare to tackle the issue, it’s essential that business owners aren’t left with a choice between unfeasible lead times and slashing profits, just to get paid.
Recent innovations in banking technology, if used correctly, will enable business owners overcome some of these problems.
Remember, when it comes to cash: turnover is vanity, profit is sanity but cash is the oxygen for a business to breathe!
Do you know how to predict your cash flow for the coming year? Could you benefit from help to plan your business income and running costs to better forecast for the future? Contact me and I may be able to help you get a good night’s sleep by freeing up your cash flow.
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Tim Cornes Business Doctor Cheshire East & High Peaks
Mob: 07582 240393
Email: timcornes@businessdoctors.co.uk
LinkedIn:uk.linkedin.com/in/timcornes/
Website: http://businessdoctors.co.uk/doctors/macclesfield
Experienced Business Coach and Mentor, owner of Business Doctors covering East Cheshire and High Peaks.
