banking
BUSINESS BUILDERS
Step Manage up your your cash flow in a Kaylyn fewHouston simple by steps by Craig Veurink
TIPS 1.
Set a realistic goal for when you want to break even. This will help TIPS you to focus your efforts and provide a numerical benchmark 1. If foryou projecting have multiple your cash loans, flow in the consider near future consolidating them into 2. one. Put cash Making flowa before single payment profits. Itcan lower mightyour seemmonthly counterintuitive, expenses but and free if you uparen’t cash.organizing your cash 2. If flow, youyou’ll aren’t run using intoaproblems businessthat credit a profitable card, quarter you maymight not have not be established able to fix any business credit. 3. You’ll Secure need credit to establish ahead ofatime. creditMost history small business if you need owners to goshould through the secure process as much of getting creditaasloan. possible. 3. Pay Thisbills is thewith bestyour waycredit to be card. prepared It can for the allow unexpected you to keep cash in your 4. accounts Consider for using up to a payroll 30 or 45 service. days longer Havingthan the professionals paying by check take orcare making of collecting electronic payroll payments. taxes saves 4. Rewards them an enormous add up. Find amount a credit of card time, helpspays streamline flow that rewardstheir and cash reap the 5. benefits Scheduleeven yoursmall payments. Don’t payments can go delinquent but do divide your help reap. payments into categories such as 5. A trusted banking relationship can “must bepay,” important, “important as they to pay” may be and able “flexible to find payment ways toterms.” improve This how can you helpmanage keep sufficient money.cash on hand.
6
Small businesses are usually founded by entrepreneurs who have a unique vision and a passion that drives them to work late hours, take chances and believe in what they’re doing. But, just as Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration, successfully running a small business requires rolling Cash up yourflow sleeves canand make putting or break in signifia company. cant time Mismanagement on more mundane, often day-toleads to daybusiness matters.failures and cash flow visibility You— can the beability driven, toimpassioned track and moniand tor have it aingreat real time idea — to fill canabe niche a major or serve concern customers forinmany newsmall ways,businesses. but if you So what don’tchallenges attend to the are details companies of the facing? business,how youcan canthey create for yourself a heap And improve their cash flow? of problems. Here’s what I’ve learned. Here, we’ll look at one of the most Cash important flowofaffects these business the big details: picture managing cash flow. Especially for early startups, knowing At its most basic level,how cashmuch flow cash is coming in and going out, refers to the amount of money coming and accurately forecasting sales That’s and into and going out of a business. expenses, is key to maintaining your certainly important for day-to-day company’ssuch health. functions as making payroll and No matter where you important, are in yourin paying vendors. It’s also business, keep these things top ofbig two ways, for being able to afford opportunities. mind: The most obvious is that if you have money on when hand, you may be break able to 1. Know you will afford new equipment, an expansion or even other improvements to help your busiEvery small business owner keeps at ness grow.of their mind the question: the front
UPSIZE NOVEMBER • DECEMBER 2023 2022
“When do I start to turn a profit?” Rather than wonder, set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future. 2. Put cash-flow management The other way relates to credit. If before profits a lender sees your company has This mightthat seem counterintuitive, healthy cash flow, they aresurvive. more likely since profits are how you to approve a loan or line of credit. your However, if you aren’t organizing cash flow, you’ll run into problems Inflation is affecting cash not flow that a profitable quarter might be Inflation is a big concern for small able to fix. Keep things organized and businesses right no for well managed sonow, you which can beisready surprise. When goods cost more, that whatever success comes your way. impacts the bottom line. As a result, some businesses are ahead overextending 3. Secure credit of time themselves. Some are runningowners cash Too often, small business flow wait too untillow they andneed becoming it to secure too reliant credit. on This loans. can cause And with a lothigh of unnecessary interest rates, some stress,companies or worse. Talk are trying to experienced to pay loans off business sooner,owners which in is draining your areatheir and cash flow. industry Theahead COVID-19 of time pandemic to knowishow still affecting some companies, as well. much revenue you’ll need up front. They’re experiencing delays receiving Take a realistic look at the situation international payments. and plan. You might have sufficient cash reserves or a rich uncle who is Three relatively easysmall financial only a call away, but most busimoves can improve cash flow ness owners should secure as much Knowing how to best manage credit as possible. This is the best way incoming and outgoing money is esto be prepared for the unexpected.
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