If you are a small business owner, cash flow is your lifeblood. If your company’s cash circulation is slow or being cut off, the first thing you should do is look at how you are managing (or not) your cash flow. Here are some questions small company owner’s ask about cash flow – with some answers.
Before I Start my New Business, Do I Need a Cash Flow Chart?
Answer: Yes. It’s important to list all of your startup costs, including your one-time expenses and your monthly expenses (fixed and variable). Now project your sales to determine if your business can be profitable.
How Much Mark-Up Should I Charge?
Answer: Always sell your merchandise for as much as the market will bear.
What Tools Can I Use to Project my Cash Flow?
Answer: Many resources can be found online, some free and some not. Read this helpful SBA article.
How do I Calculate my Break-Even Point?
Answer: Create a spreadsheet listing all your sales revenue and expenses by the day, week, month and year. You can find break-even templates online, and the SBA has some guidance.
How Much Cash Reserve Should I Have?
Answer: Enough cash to cover your slow months and any unknown or variable expenses that may occur over a 3-6 month period.
How do I get my Customers to Pay Quicker?
Answer: Try offering a discount for cash on delivery (COD) or net 10 days. Make weekly reminder calls to customers when invoices are due and offer to take credit card payments over the phone. Check out the SBA’s advice.
I Can’t Get Credit. What Should I Do?
Answer: Sell your current inventory and pay cash for all future inventory and services until you have built up your credit again.
What Options do I Have if I Need Funding?
Answer: Talk to GrowthCC. We are experienced at finding the best financing solutions for a variety of small businesses. Give us a call to see how we can help you manage your cash flow.