Hit Refresh on Your Business' Cash Flow
Laura Renner • September 28, 2020
Managing cash flow was a long and tedious lesson I had to learn the hard way. Eventually, I learned that “hope” was not a strategy and that there is always time to start over and hit the “refresh” button on your business.
Back when I owned a temp agency, the problem of managing cash flow hit me acutely. Like square in the jaw, punch in the gut, it hit me! On paper, it looked like a six-figure business but in reality, my bank account was always bouncing off of zero. Every pay period, it was a mad dash game of musical chairs. Except the stakes were much higher.
As soon as the temps submitted their timesheets, I would race to invoice the clients, cross my fingers, and hope the big ones would pay by credit card immediately. Then I would cross my fingers (again) and hope the funds would be deposited in time before the payroll payment was debited from the account. All the while, knowing banks in America would stack the odds against me in favor of the fees they could collect.
I remember thinking, “once I figure this out, this is going to be an interesting lesson learned but it sure sucks right now.”
And then it got worse. I took on expensive debt that just kept growing and growing. One morning, around New Year’s, I faced the music and realized that if I did not find a way out, we would be out of business within six months.
At that moment, I finally understood the importance of managing cash flow. I finally understood what I had failed to grasp in all those finance and accounting classes and workshops:
Cash is King
I was able to refinance that expensive debt which released a chokehold on my available cash each month. As a result, we were able to grow. It was so freeing both for my business and myself.
Eventually I read a book,
Profit First
, by Michael Michalowicz which was a game changer. I ended up tailoring his methods in ways that work for me. Now we take on initiatives we know we can already afford. Further, I am reluctant to take on debt financing for initiatives where I *hope* our repayment will come from a resulting increase in revenue. Instead, I ask, “if this fails horribly, will we still be able to comfortably meet our obligations?” Gone is the “hope” tactic I once used. We are more solid in our revenue-making decisions.
Blink and start over
It is never too late to hit the “refresh” button on your business. A new year is the perfect time to get things in order with your cash flow. Take this last quarter before the new year to examine where debt is collecting and where you are using “hope” as a tactic. By taking this extra time to
analyze where your cash flow issues are, you are making informed decisions for the new year and not knee-jerk ones. Your business, vendors, employees, family, and physical and mental health will thank you for it.
Freedom Makers Blog
Stop letting email control your day! With the right email management system—and the right support—you can reclaim your time and stay ahead of your inbox. Embrace practical strategies to organize your email, automate routine tasks, and reduce inbox clutter. Then, bring on a skilled virtual assistant to handle your email for you, so you can focus on what truly matters.
Many business owners struggle to fully integrate a virtual assistant into their workflow, often limiting the potential of this valuable resource. Discover how entrepreneurs and small business owners can transform their working relationships with virtual assistants into trusted, strategic partnerships. Learn how clear communication, expectations, and onboarding can maximize productivity and drive business success.
Embrace the full potential of your virtual assistant in 2025 and grow from just delegating tasks to building a collaborative partnership. Discover how trust, strategic delegation, and aligned goals can transform your relationship with a Freedom Maker virtual assistant into a business-boosting asset.
Website by EnlightWorks