10 cash flow tips for small business survival


‘Cash flow’, no matter the industry sector, business size or how long you’ve been in business it’s the one word that strikes fear into the heart of any entrepreneur. A lapse of concentration or one slow-paying customer can spell disaster for the most ambitious business owner.

Samantha Watt, owner, and manager of integrated communications agency Watt Communications celebrated 10 years in business in 2013.

She shares 10 lessons she has learned in this time about managing that precarious commodity - cash coming into the business, timeously.

You push the payment button: As the business owner, you make all the payments if possible or at least approve every payment so that you know exactly what money is going out your bank account and why. Simple but steadfast advice and one of the best ways to keep tabs on what money is being spent on.

Quarterly reviews: Managing a business is time-consuming and monthly financial performance reviews are not always possible. At the very least, take a step back on a quarterly basis and review sales, expenses, and profit.

Partner with a great accountant: This person will be your lifesaver. The better your relationship with your accountant, the more value you will get from using him/her as a business consultant.

Be aware of the basic processes: Know when it is a VAT month, manage your PAYE amounts, know that everything matters and adds up at the end of the day and will obliterate your cash flow if you are not prepared.

Big picture thinking: Never make decisions in isolation; always think of the bigger picture. Cash flow is not about today, but far more about tomorrow.

Use technology: Modern tools make running a business far more efficient. Embrace Internet banking and mobile technology to make the technology work for you. Time is money and the last thing you want is to spend your valuable time on administration.

Marry your bank manager: Ok, if you can’t do that, at least have a very good working relationship with him/her. Direct access will help when you need it most. From simple things like increasing your electronic payments limit to approving an overdraft, your bank manager is a must-have relationship.

Control expenses: Find suppliers who offer terms, order bulk stationery or supplies, recycle paper. Become innovative, always remembering that the small things count at the end of the day.

Reward staff in alternative ways: Paying bonuses is expensive and drains your cash flow. So look for different ways to say thank you or make an employee feel appreciated: pay for a flight or a meal out, or simply give extra time off. If you’re creative, you can find many ways that have less impact on your cash flow.

Bring in the heavies: Not all clients pay on time, and some may even not pay at all. Consider using a debt-collecting service (usually found at a law firm). Most of them work on a small percentage fee and take the pain away from you hounding for payment. It is a trouble-free, professional approach that is not expensive and works well to recover the money you have worked for.

Key takeaway: Like most things in life you learn as you go along. Be practical and set up the necessary processes and relationships from the start. They not only work as aids but also as safety nets.


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  • Control control control. If you take your eye off the money it has a tendency to run away!
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  • how do i know that i am making cash flow while when im getting small profits i still have to buy materials is that cash flow?
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