Let’s face it, making moolah is definitely a top priority when it comes to running a profitable business. But, if you’re eyeing longevity and stability, it’s important to think beyond profits and explore ways to build a solid financial foundation for your company.
Cashflow is the beating heart of your business. Without an even and predictable flow of cash into the company, you can’t cover your overheads, you can’t pay your employees and you can’t run your day-to-day operations – let alone think about expanding and growing the business.
So, what’s needed is a healthy cashflow position AND a good focus on driving profits. By achieving a perfectly balanced cashflow and focusing on profit-driving strategies, you’ll be unstoppable in the pursuit of business success.
Let’s be real, keeping track of finances is not exactly a walk in the park, especially when you’re diving headfirst into the world of accounting jargon! But if you’re going to be in control of your financial destiny, it’s important to get your head around the important process of cashflow management. This is especially true in the current business landscape, where sales revenue may be less buoyant, cash can be tight and the market is going through a challenging time.
Let’s look at some of the key things to understand about your finances:
- Profit is a by-product of a successful business – as the owner, you want to make profits, but profitability isn’t the only goal. A business can easily be profitable, but also be highly unstable in the longer term. What you want is stability and consistent revenues. By balancing out your cashflow strategy and keeping an eye on long-term stability, you can set yourself up for business longevity and success.
- Cashflow is the blood that keeps your business alive – good revenues (income) serve to bring cash into the business. Without cash to cover your operating expenses, you have no means to keep the lights on in the business. So cash really is king! Without cash flowing into your business it might as well be a metal detector on the beach – you’re searching for treasure, but all you’re getting is a whole lot of sand in your pockets.
- Know your cost base and overheads – the flipside of your cashflow position is your costs. In an ideal world, you want more cash inflows than cash outflows, so it’s important to know your expenses and costs and to manage them carefully. Managing your costs can feel like playing a game of financial Tetris, but with a solid strategy and a winning attitude, you can stack those expenses like a pro and come out on top!
- Be proactive about spend management and easing expenditure – if you can take action that reduces your spending, that is hugely positive for your cashflow position. Choose cost-effective suppliers, negotiate purchase price and bring that cost base down.
- Drive more revenue, through increased sales and marketing activity – if you can increase your revenues, you also boost your cashflow. So it’s important to be proactive about running targeted sales and marketing campaigns to increase your sales. It’s time to let your inner Don Draper out and unleash some epic sales and marketing campaigns! With the right strategy and a little bit of pizzazz, you can bring in bucketloads of revenue and keep that cashflow gravy train chugging along!
Keep the cash flowing and the profits take care of themselves – if you achieve the ideal cashflow position, the company sits on solid financial foundations, the cash is there for investment and the business can grow. It’s that simple. Keeping your cashflow healthy and happy is like feeding your business a steady diet of green smoothies and probiotics – it keeps everything running smoothly and sets you up for a thriving, healthy business.
Talk to us about improving your cashflow management
Whether you’re a rookie or a seasoned veteran, our team is here to give you the financial advice you need to dominate the cashflow game! From financial forecasting to expert budgeting advice, we’ve got you covered.
Our team will closely review your finances, analyse your cashflow, and uncover secret strategies to help you bump up your cash income and reduce those pesky cash expenses. With just a few quick changes, you’ll be swimming in the dough while still generating killer profits. Who says you can’t have your cake and eat it too? Don’t be shy, reach out and let’s have a chat about your cashflow conundrums!