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Will I have enough cash to stay afloat?

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Part 1: Cash flow budgets to strengthen your business

Do you have enough cash flow? Find out in your cash flow budget

A company’s cash flow budget is a mainstay of their financial reporting and can be used to predict and forecast cash flow requirements. If you’re not currently looking at this type of report, here’s why you need to prepare one and what it can tell you about the business.

Why prepare a cash flow budget

The cash flow budget is quite simply a report showing how much money is entering and exiting the business. It shows how much cash you’ll have on hand at any given period of time.

First and foremost, a cash flow budget is a plan for business owners and management to help understand their cash position and achieve their business goals.

Secondly, and just as importantly, a cash flow budget is usually required by anyone considering lending your business money. This plan helps demonstrate how your suppliers will be paid, how quickly your company can grow, and the financial viability of the business. It also shows the potential to declare dividends and increase owner equity, which may be an important aspect for business owners and shareholders.

The ultimate goal is to be cash flow positive: bringing in more cash than is going out.

 

What does a cash flow budget tell me?

A cash flow budget will estimate your future business income and expenditures, and will help you predict if and when you’ll fall short so you can take proactive measures to avoid those situations.

Once complete, the forecast will give you information on at least seven important points:

  1. What months you might run short on cash
  2. If you have enough cash flow to pay your bills at the end of every month
  3. If longer payment terms are potentially putting you in a cash flow crunch
  4. Whether or not you have the right minimum beginning balance for each month
  5. If there are seasonal fluctuations in cash flow
  6. If you can take advantage of unexpected supplier discounts
  7. If you need to raise capital

So how do you complete the ever-important cash flow budget? Read part two and learn the 7 steps to budget your cash flow.

 

7 Steps to create your cash flow budget

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We have all heard the expression “Cash is King!”  or its all about the cash flow.    However, not everyone knows how to budget or plan their cash flow.    The article “7 steps to create your own cash flow budget” could be just the help you need to understanding your particular cash flow….

 

Do not forget to RSVP to our next event that will teach you how to grow your business the right way and without spending tons of money money on marketing!

Supplier discounts .. Something to think about

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Attached is a nice article showing you how you can have your cake and eat it to0.  Taking advantage of supplier discounts and improving your cash availability.   https://liquidcapitalcorp.com/blog/learn-quick-way-take-advantage-supplier-discounts/?ref=793

This is something that is regularly discussed at the Monthly SBAB luncheons.    If this is of interest to you,  you should consider attending.

 

You Can’t Do It All!

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A common pitfall we see all too often, is a Small/Medium business owner trying to do it all.    Most entrepreneurs are successful because they are super motivated and are very results driven.   At some point , they reach their limit.  The only way they will be able to reach their full potential, is by relying on other experts.     The attached article provides obvious ways you can utilize others to help you grow.    But there are many other possibilities.   I am sure just about everyone on the board can suggest other areas as well… Helpful Ways to Save time and Outsource Admin

Creativity – Your Competitive Advantage

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Creativity can be your ticket to success.   Creativity comes in all shapes and sizes.     You can use it in problem solving,  layout, product design or fine tuning your offering to meet the needs of your clients.    Since my clients are looking for financial assistance, I like to understand as much about their business as possible before customizing a solution to meet their needs.    The attached article can serve as some good fuel for creativity….

“Get Creative for More Profit” Article