In the same way that the basic recipe to make the best chicken soup is heavily reliant on the chicken, your basic recipe to build a better business will always lean most heavily on cash flow to keep it bubbling away to perfection.
Cash Flow is the lifeblood and the main ingredient of all successful businesses and integral to the recipe to free yourself from money worries.
What follows here are my basic steps for taking control of your Cash Flow so that you can create a tasty dish that represents the successful business you have always hungered for.
- Never Run out of Cash.
Running out of cash is like trying to make soup without the main ingredient! Make the commitment to do whatever it takes to be absolutely certain that doesn’t happen to you…First, catch your Chicken.
- Cash is King.
It is important to recognise that the basic steps of this recipe are what keeps your business alive. Remember, “Cash is King.” No cash means no business.
- Know your Cash Balance now.
Do you know your Cash Balance now? Do you realise how important it is to the mix? Even the most experienced cook in the kitchen will deliver a “Flop” if they are using the wrong ingredients and the wrong quantities and timing. Make sure you’re using accurate and complete Cash Balances to make your business decisions.
- Do Today’s work today.
The key to keeping an accurate Cash Balance in your system is to do today’s work today. When you do this, you will have the ingredients you need when you need them…then you’ll be cookin’ with gas!
- Do the work or get someone who will.
The simple rules of the successful kitchen…to ensure you have an accurate Cash Balance as part of your mix…is to do the work yourself or get a qualified and reliable “Kitchen Hand” to do that part for you.
- Don’t manage from the Bank Balance.
The Bank Balance and the Cash Balance are two different ingredients. Rarely will the two ever give you the same result. Think of the Cash Balance as the “Freshest” solution.
- Know your Six Months Cash Balance.
What would you expect your Cash Balance to be six months from now? Having this answer clearly in mind will transform the way you manage your business and contribute to the clarity of the result.
- Cash Flow Problems don’t just happen.
Some businesses fail because the Owner didn’t see a Cash Flow problem bubbling up in time to something about turning down the heat. The Six Month Cash Balance will always be an essential ingredient in any successful financial recipe.
- Have Cash Flow Projections.
Your Cash Flow projections are like that favourite recipe book you keep…front and centre…at eye level on the middle shelf.
Like all good recipes, they are the key to making wise and profitable decisions…when to do a long slow cook, when to turn up the heat and always make sure you’ve got your timing right!
It’s impossible to run your kitchen successfully without that classic recipe book…Your Cash Flow projections.
- Take good care of your Customers.
Eliminating your Cash Flow worries will free you up to focus your time and talents where they will make the most difference…preparing exciting new “Dishes” and providing exemplary service for Your Customers.
So, before you decide it’s time to “Plate-Up,” make sure you’ve got the recipe right, got the best ingredients at the ready and your timing is spot-on.
That’s the recipe for success in any business kitchen!
Contact Invision Bookkeeping on (07) 3293 1436 or email us.