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Cash Flow Management For Businesses

 In Cash Flow

Cash Flow is King

Cash flow is a major factor in the success of any business, driving everyday operations, expansion, and purchasing power.

Is Cash Flow More Important Than Profits? It might just be.

Insufficient Capital

This is the number 2 that small businesses fail, according to the U.S. Small Business Administration. However, since 2008 43% of small businesses needed funds but couldn’t get financing from a bank.

Cash Flow: Just The Facts

  • 68.9% of business owners fear to lose their business due to a lack of available cash.
  • 58.2% of businesses identify slow paying customers as the biggest challenge in managing their business cash flow.
  • 37.5% of CEO’s identified cash-flow as the most difficult aspect of running their company.

4 Rules Of Cash Flow

1. Growth Sucks Up Cash

Growth will cost you money. It’s a matter of working capital. The faster you grow, the more financing you need.

2. Have a Cash Flow Projection

What do you expect your cash balance to be six months from now? This one question will transform the way you understand your business.

3. Understand Receivables

The money clients and customers owe you is called “Accounts Receivables.” And every dollar in accounts receivable is a dollar less cash available for the business.

4. Cash is King

Cash keeps a business alive. No Cash= No Business.

Increasing Cash FLow: Traditional Options

Credit Cards

High-interest rates and fees for mismanagement make credit cards a dangerous option.

Bank Loans

Extremely low approval rates, along with hidden fees and personal guarantees make banks a time-sucking low probability option.

Equity

Requires giving up a ownership, a percentage of profits, and partial, control of the company and the decision making process.

Thinking Outside The Box: Receivables Financing

Accounts receivables financing converts outstanding invoices into cash within 48 hours. With expedited payment, companies can meet short-term and long-term goals.

When Cash Flow is Freed Up

The constant worry about paying bills is eliminated. Relationships with your vendors are improved. And most importantly, business owners are now able to focus on running and growing a successful enterprise.

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