The last two posts covered the first four of the killer mistakes you can make that will not only make you lose your fish, but possibly your entire company. Today we’re going to talk about the fifth killer mistake: Up Cash Creek Without a Paddle, or when you’re running out of cash flow.
Help Avoid Running Out of Cash Flow
Even when business is good there’s still a chance of running out of cash flow. You have to always be prepared for a slow in sales or a surge in expenses. One of the keys to balancing your cash flow is to get your clients to pay on time. This can seem like a nightmare, but is absolutely essential to a successful business.
Here are some tips to speed up the payment process:
- Always send invoices on time and adjust your records for potential audits.
- Learn how the client processes payments on their side and find out precisely where to send invoices.
- Find out who’s in charge of processing orders and payment, so you know who to contact if needed.
- Have a follow-up procedure in place, just in case.
- As a last resort, call your contact to ask questions.
- Always make sure your invoices are correct before sending them out.
You also need to make sure your cash flow is protected. You can do this by:
- Always know which accounts need paid and when.
- Negotiate with your suppliers for the lowest cost possible.
- Have a bank contingency plan in place.
- Build your own inventor network.
These are all great ways to protect the cash flow of your business and prepare for fish transitions and slow sales. These last few lessons are all about finding and catching your big fish clients. These clients are essential to your success and your need to take the time to work through each of these steps carefully and correctly for the best success.
If you find yourself having issues with running out of cash flow, and you are in Chicago, Oak Brook or surrounding areas, contact us today if you feel you need some coaching on this topic!