Let's talk the C word
Dec 9, 2019
Revenue is vanity, profit is sanity, cash is king – Unknown
Never take your eyes off the cash flow because it’s the lifeblood of the business – Richard Branson
If I had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction and cash flow – Jack Welch
There is really only one way to address cash flow crunches, and it’s planning so you can prevent them in advance – Elain Pofeldt
That's right - Cashflow (not Christmas).
Understanding and planning your cash position is important at all times, but it can come under even more pressure during the holiday season. Often there will be a slow down of work which can result in reduced income through January and February. Expenses like wages, leases etc will all continue through this holiday period which can result in a cashflow crunch.
Like anything, planning is the most important step. You should always have a mechanism or method for understanding your cashflow. For some it will be as simple as the ‘gut feel’ they have developed over years. For others, it’s really knowing their client base and their expenses – understanding what has to come in, to cover what, and organising their jobs around the clients who pay the quickest. For others, often those with more moving parts in their business, it’s great spreadsheets, and a bit of a combination of good guess work and their gut feel.
Whatever your method, take 30 minutes this week to check in on your cashflow for the holiday season. If it looks like there is a bit of a hole, and you’re not sure how to fill it then it might be worth seeing if you can adjust some payments for this period. Or perhaps it’s time to talk to your friendly bank manager (well in advance always helps).
If you want to get better at cashflow planning, get in touch. We can help.