More than half the year has gone by and before you know it, it will be December 31st. Yes, it’s true — time does fly. And when you’ve set a goal for maximum cash flow you must keep your eye on the bottom line and reevaluate your cash flow strengths and weaknesses.
Preparation is a must if you are to reach your goal. Cash flow can make or break your business. That’s right. It’s cash flow, not profits, that is the key to your success. This year has been a tough one with the economy wobbling and energy costs skyrocketing. Pay attention to these tips shared by Karlene S. Robinson of KPR Funding Solutions, LLC:
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1. Build a Cash Reserve: Whether a business is just starting out or fully-established, a cash reserve is a must. This is simply a set amount of cash put back into savings for emergencies.
2. Re-evaluate Business Cash Movement: Cash moves in and out of the business bank account for items such as invoicing, outgoing bills, cash jobs and payroll. Business owners need to know where their cash is going and where it is coming from.
3. Inventory Check: Business owners should take a look at their inventory list to see if there are products that could be moved faster by selling to another vendor or at a discount to present customers. Inventory that sits too long could become that much-needed money right now.
4. Energy Costs: Every business must look at energy costs as a serious cash vacuum after the astounding rise of oil and fuel prices of 2006. Whether it is the cost to operate machinery, heat/cool the business facility, or buy fuel for company vehicles, thousands of dollars can probably be saved by analyzing the current energy consumption methods.
5. Debt Management: Manage the business debts wisely. Refinance at lower interest rates. Keep payments up-to- date so no penalties will have to be paid. Renegotiate payment plans that are hurting your cash flow. Debt does not have to hinder the business. It can be managed and overcome if the effort is put forth.