Cash Flow is Important!
Watch this short video, and remember that ultimately, cash flow matters.
Looking around at a office full of smiling staff, receiving a box of chocolates from a happy client, knowing you’ve helped someone’s career – all these can make your day.
Having a great plan and great work-philosophy – everyone agrees these are important. No argument here.
But if we are responsible for the livelihood of others, we have to be conscious every hour of the day that the only currency that the bank, taxman, landlord, and real, physical world accepts is money.
Companies normally fail because they run out of cash. Keeping track of cash flow and continually looking for and implementing ways to improve it keeps your company healthy.
Seven ways to improve cash flow.
These are a limited number of levers that improve cash flow :
- Pricing. Increase (or reduce) the price of your goods and services.
- Volume. Increase the quantity of what you sell.
- Cost of Sale. Reduce the cost of what you sell.
- Operating costs. Reduce your operating costs
- Collecting money. Ask customers to pay earlier and have a means of ensuring they do so.
- Paying later. Extend the time taken to pay your bills
- Inventory. Reduce your inventory.
It is better to proactively manage these items rather than finding yourself in a position where you have to manage them to save your business.
Some of my clients post these levers on a wall in their office to keep them in mind.
The final part of this Going Solo section is the Section Summary.
Going Solo Section Index
NLP Going Solo 1: Start with the end in mind
NLP Going Solo 2: Balanced Scorecard
NLP Going Solo 3: Customer Proposition
NLP Going Solo 4: Your Brand
NLP Going Solo 5: Choosing Customers
NLP Going Solo 6: Reaching Customers
NLP Going Solo 7: Cash Flow
NLP Going Solo 8: Summary