Category Entrepreneurship

Business Cash Flow

The Big 6 Ways of Staying on Top of Your Business Cash Flow

Every entrepreneur runs a business with the intention of making profit irrespective of the size of the business. Profit has become the focus of many stakeholders of any business and for that matter the first item to look out for on the financial statement.

This is good but I think the most important thing that determine the success or failure of any business that stakeholders should be critical about is ‘cash flow (thus, how liquid is the business) because receivables are part of the profit and it does not mean cash.

Business Cash Flow

Business Cash Flow

I will simply define Cash Flow as how cash come in and out of the business. Cash is the lifeblood of any business. Businesses may make profit but struggle to pay its bills in the short term because of poor cash management.

To help this process, here are 6 essential checklists you need to know about staying on top of your business cash flow.

  1. Manage accounts receivable

Try as much as possible to avoid locking up cash in receivables (thus, reduce selling on credit to customers). Consider offering your customers incentives, such as discounts off the total, for early payments.

  1. Cut down costs

Always find new ways of keeping your cost on the low. Focus on recurring monthly, quarterly or annual expenses. “Can you cut back on utilities, rent or payroll? Are you spending money on subscriptions or services you’re not using or insurance you no longer need? Can you renegotiate the terms of outstanding loans or leases?”

  1. Use mobile payment solutions

If you sell products or provide services at customers’ homes or offices, get paid on the spot with mobile apps that use your smartphone or tablet to accept payment by credit and debit card.

Business Cash Flow : Mobile Payment Solutions

Business Cash Flow : Mobile Payment Solutions

  1. Delay payments to your Suppliers.

Take advantage of vendor’s credit terms. “Find out how late you can pay your vendors without risking late fees or harming your relationship. This keeps the cash in your account and out of your vendor’s until it absolutely has to be there”.

  1. Lease equipment instead of buying it.

Avoid tying up cash in fixed assets. Through leasing vehicles, computers and other business equipment, you get access to the latest features and free up cash.

  1. Monitor your cash flow regularly.
Business Cash Flow: Monitor Cash Flow Regularly

Business Cash Flow: Monitor Cash Flow Regularly

It is very prudent to regularly keep records of cash coming in and out of the business. By so doing you can easily stay on top of your business cash flow wherever you are.

Take your business to the next level through the Advanced Digital Marketing Program. The Advanced Marketing Program is marketing, sales and brand development solution designed to market and promote your business growth by leveraging web design, web analytics, blogging, social media, SEO and copy writing.

 

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About the Author

Joseph Edem Denyo is a Senior Auditor at John Allotey & Associates, an Entrepreneur and the Accounts Officer for Think Expand Limited. He has Bsc in Accounting with tremendous passion for helping small and medium sized businesses strengthen and improve their cash flow. He resides and lives in Accra, Ghana.

 


Build a Successful Business

5 Simple Principles to Build a Successful Business

Are you looking to take your passion and turn it into a thriving, profitable and successful business? Building a successful business can be very hard and difficult. But if you have a business model to build a successful business, the process will become easier and even faster.

Sometimes it amazes me about how some entrepreneurs are able to build a chain of successful businesses, sell them and makes millions of dollars while some entrepreneurs are barely striving with building one. The statistics say that 90% of all business start-ups fail before their 10th year.

The question is: What makes the 10% very successful despite the odds?

The answer is that successful entrepreneurs are using a business model that the unsuccessful entrepreneurs aren’t using. Successful entrepreneurs are leveraging certain basic principles to build successful businesses.

They follow the same pattern to design, create, launch and build new successful business ventures. Despite the odds, they end up being successful. And the bottom line is that it does matter the kind of business you’re running if you learn the principles to build a successful business and apply them, your business will blow up!

So here are the five simple principles to build a successful business:

  1. Creativity
  2. Cash Flow
  3. Leverage
  4. Management
  5. Expansion

Creativity

Creativity is the first principle you must begin to apply in your business. Creativity is tied to your passion, talents and your abilities. So the very first step to build a successful business is to look within yourself and find your genius.

Creativity-Build a Successful Business 2

Creativity-Build a Successful Business 2

What are you good at? What can you do better than anyone? What do you love doing more than anything else that you can do it even for free? Identity your creativity! When you do what you love, it will become natural for you to be very creative and innovative.

Once you identity and develop your creative talents, passion and potentials. All you have to do is to create a product or service that you can render to people to generate cash. Analyze the market and find out what people need, want and desire….then use your creativity to bring up products and services to fill their needs and wants.

Cash Flow

Cash Flow is second step in your business development process. Cash Flow is where you monetize your creativity. It is where your creative abilities begin to generate cash for you. It is the level where you begin to make money with your creativity.

cash-flow-Build a Successful Business

cash-flow-Build a Successful Business

This level requires some key business skills and abilities—sales, marketing, accounting and legal elements. To generate cash from your business, you need to know how to market and sell your products and services. You can use digital tools and technologies to help market your services.

Then you keep the records in your accounting system. Your records should ensure that you have a net positive cash flow from your creativity after all operating expenses.

Also make sure you have legal contracts and documents backing all your business activities with companies, government agencies and anybody you do business with.

Leverage

Once you begin to generate a decent positive cash flow from your creativity, the next step is to apply the magic secret of the rich—leverage. Leverage is the difference between a scalable business  and a non-scalable business.

Leverage-Build a Successful Business

Leverage-Build a Successful Business

When you learn how to apply leverage in your business, you can skyrocket your cash flow. You can multiply your cash flow by applying the power of leverage in your business. The key is to understand how to use leverage to build a successful business.

Ideally, there are three forms of financial leverage you can use in your business:

  1. OPT—The Leverage of Other People’s Time
  2. OPM—The Leverage of Other People’s Money
  3. OPR—The Leverage of Other People’s Resources

To use OPT in your business, you must understand business systems and delegation. What you do here is to create a step by process to deliver your product or service, and then you employ other people to follow the process to deliver the results. That means the job can be done with or without your presence.

You can use OPM in your business if you want to expand your business. Grant Cardon said, “You need new revenue for funding.” So you have to create a business plan, assemble your team and pitch investors until you raise the need funds to take the business to the next level.

You can use OPR in your business by developing strategic partnerships with other companies and entrepreneurs. This enables you to tap into their resources to grow your business. You can develop strategic partnership to mutually promote and grow your customers. Affiliate marketing is an example of OPR.

To use leverage in your business, you must be sure you have understood key items when it comes to business development. You need business experience, confidence and education to begin to use the above forms of leverage in your business. That means continually growing and developing yourself.

Management

In the level of leverage, you develop business systems and employ people to get the job done. So it means your technical services and products can be delivered without your presence. At this stage, your business is in the process of becoming a giant business asset.

Management-Build a Successful Business

Management-Build a Successful Business

Management is an essential key in business development. A well-managed business can make a business become very valuable and make tremendous amount of money. And a well-mismanaged business can fail very fast and lose money quickly. So you will have to manage your business operating systems well and your people to deliver tremendous results.

In the Book, Uncommon Sense Common Nonsense, Jules Goddard and Tony Eccles made a profound statement about management: Management is a social technology for bringing people together to achieve extraordinary result.

So at the management stage of your business, you have to install a management team and develop management systems the team will use to manage and run your business effectively. At this level, your business has become a giant asset—ready for the holy grail of expansion to be applied.

Expansion

Expansion is the holy grail of business development. Do you want to build a successful business? Then you have to take your business to this level—expansion. Expansion is where your business begins to make money beyond your imagination.

Robert Kiyosaki said, “When Ray Krock purchased the humburger stand, he leveraged himself because the burger business could make money with or without him. And this is where most S quadrant business owners stop, keeping their businesses small. When Ray Krock developed a franchise system for the small business, he expanded the leverage into the B quadrant.”

Leverage is the stage where your business becomes an asset. Management is the stage where you improve and grow the asset by the help of a management system and a management team. But expansion is the stage where you exponentially increase the growth of your business asset.

Expansion-Build a Successful Business

Expansion-Build a Successful Business

Franchising is one way of expanding the business. Opening other branches at other places is another step. Taking your business public through an IPO is another step. You can also use licensing to make other people to produce your products and services and pay royalties to you.

Expansion is the stage where you take your business to the rich level—where your business grows indefinitely. It may take you five to ten years to reach the expansion level. It also requires persistence and focus to keep moving on by following this five principles to build a successful business.

 

Take your business to the next level through the Advanced Digital Marketing Program. The Advanced Marketing Program is marketing, sales and brand development solution designed to market and promote your business growth by leveraging web design, web analytics, blogging, social media, SEO and copy writing.

Advanced Digital Marketing Program

Advanced Digital Marketing Program

Talk To Us

Email: info@expandgh.com

Tel: +233 2228133

Mobile: +233 548334499

WhatsApp: +233 548334499

Subscribe for business development and digital marketing insights, tips and strategies to grow your business.                                 


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