Many Rivers has 38 local business coaches throughout Australia. We asked them their top 10 tips to protect your business in uncertain times.
Protect your cash-flow
In uncertain times it is important for you to understand your business cash-flow situation. Cash-flow is all about managing the money coming into and out of your business account. It’s about having cash being generated by sales and cash being used to make payments – and having cash left over. Having this information accurate and up to date can help you make the best decisions to control and adapt your business to the surrounding economic environment.
Good cash-flow knowledge will improve the flexibility of your business to respond to uncertain times.
Your cash-flow review should focus on the amounts, timing and certainty of your business income and expenditure.
- Amounts – know the size ($) of all your income and expenditure payments.
- Timing – know when you expect your income and expenditure payments to arrive into or come out of your bank account.
- Certainty – know the risk of any income or expenditure not arriving at all or arriving later then you expect.
Your aim is to have cash in your bank account. Wherever possible you should leave some spare cash available in your bank account, in case your income reduces quickly or unexpected expenses arrive. In challenging times we know this is hard to do, however, this is very important for your business to survive.
By keeping cash in your bank account and keeping your business cash-flow positive you will be in a stronger position to make the best decisions for your business. Many Rivers has created a table of actions that you can consider to help keep your cash-flow positive and give you the flexibility to protect your business.
A specific note on debt. Be debt aware. Be very careful about taking on debt right now. Be especially careful of accumulating credit card debt and avoid informal lenders, especially payday lenders. Seek input and support from Many Rivers or your bank if your cash-flow is stuck or dries up.
You may have heard people say “we are all in this together”. This is true for cash-flow as well. Your cash-flow impacts on the cash-flow of others in your community so be aware of the flow on impacts. Be careful to ensure that your business decisions are not harmful to other people’s businesses. One example often used to manage cash-flow is to be quick to get payments from your customers and slower to pay others. This strategy may not be best the strategy for your network of businesses right now.
Many Rivers CEO, John Burn has a message for all Australian businesses: “I want to encourage all the businesses that Many Rivers works with to be very careful to not just support their own business, but also other people’s businesses in the community too. This is not about survival of the fittest, rather it’s about survival of the community; it’s about working together and getting back to the fundamentals of what business is about.”
Navigating your business’s cash-flow day to day can be difficult, and even more so now in these uncertain times. If you are an existing Many Rivers client and have questions about your business’s cash-flow, please get in touch with your business coach, they are here to help. You can click here to read a summary of the top tips to protect your business.
For new clients, Many Rivers is here to help people start small businesses and grow existing businesses and we are here to support you the whole way. Please take the Small Business Self Assessment and see if we are right for you.