3 Tips To Manage Your Money During The Tight Months
Whether you’re starting out, or have suddenly hit a rough patch after years of being open for business, learning how to manage your money is a difficult and often frustrating task. Unfortunately, some of us never truly master this skill, but if you wish to keep the doors of your business open, it’s important to develop your money management skills. Getting to the Heart of Money Management Two important factors that influence your ability to get a handle on your money are profit and cash flow. Controlling your direct and indirect costs can maximise your overall profit. Creating positive cash flows by timing your payments to occur when they are the most advantageous to you is also important. Doing so makes it easier to build cash reserve so that you can protect yourself against the very real possibility that you will run out of money at some point in the future. It will also ensure that you have adequate working capital to open and run your business. What is a Cash Reserve and Why Do You Need One A cash reserve is simply a portion of your earnings that you save rather than spend. Having a cash reserve, or...
Read MoreCash Or Crash – The Importance Of Managing Cash Flow
One of the keys to being successful in any business is the ability to properly manage the cash flow. Every business ultimately relies on cash to pay employees and suppliers in order to provide the goods and services to customers so that it can remain in business. While it’s certainly possible for many businesses to access a line of credit to smooth out any fluctuations in cash flow so they can still acquire goods and services to provide their customers, this will only work to help a business to stay afloat in the short term. Without a long term plan to properly manage cash flow so that employees, suppliers and even taxes and other fees are paid on time, a business will ultimately fail. If you find that you are often robbing Peter to pay Paul in your business just to stay afloat, you might want to consider using the following strategies to better manage your cash flow. Have a Plan Make a realistic plan for your cash flow that is at least 12 to 16 weeks in advance. You may find that having a calendar with a forecast of all of your expected cash outflow and intake for...
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