Good cashflow management is absolutely fundamental to the success of your business.
Did you know that 90% of businesses fail because they don’t manage their cashflow well? In this article we will give you an introduction to cashflow and some tools you can use to really get on top of it.
Intro to Cashflow | Business Foundations | Article
Key Points
- The trick to good cashflow management is to keep track of the amount of money coming into and out of your business, the timing of when your money is due to come in or out of your bank account, and understanding the risks
- Understand what is a variable cost
- Understand what is a fixed cost
- Make sure you know how to interpret three types of financial statements: balance sheet, profit and lost statement, cashflow statement
- Be conservative
- Set and review expectations
- Keep your business and your personal bank accounts separate
“My business coach was such a great mentor and helped me out every bit of the way. It’s good to see the planning through the cash flow forecast – how much your income is and how much you’re spending. I didn’t realise how much I could be making at the end of each month. It was a good overview. I think I got a better understanding of how businesses work. When we were working through the business plan, John was telling me stuff I didn’t even know about or think of, and that was really helpful.” – Zara, Makeup by Zara Parker, Pilbara WA
Next Steps
Did you love this business foundations lesson? There is always more to learn about your small business as your business journey continues and evolves. A good way to learn is to put aside some time every week to look at a new Many Rivers Small Business Resource.
For existing clients, make sure you reach out to your business coach if you have any more questions about this topic. It is always a good idea to talk about what you just learnt. They might even have some more tips to share with you.
If you are new to Many Rivers, find out more about what we do by looking at some of our client stories. Each of our clients have a very different journey to share about their business and their experience working with Many Rivers. You can read about the different programs we have available here.
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