17/01/2017
I have seen good business crumble and I have seen small businesses thrive and sometimes under difficult economic conditions. I found out why; I want to mention that although you know the product very well, know your sales pitch well, has a huge customer base or even have the resources available to build your business, you might lack in this crucial thing pertaining to your business; "Cashflow" Yes, Cashflow. If there is no cashflow in the business you are technically insolvent, because you cannot move an inch. you then have to wait for money to come in before you can actually do anything. I don't want to ask how many people have been there already excluding me. Its not a good place to be.
Some practical solutions to this problem; Don't spend all your available cash and don't tie up all your available cash into non liquid assets. Try to turn your stock over fast enough or make your product fast enough for e.g build the garage if you are in building; finish that job fast enough, obviously without compromising the quality and workmenship. the sooner you get it done the quicker you get paid. Another way to manage your cashflow is to ensure that you have cashflow available to start a new job without using the deposit you take. I know that you will agree with me; In business, CASHFLOW is KING. so, become diligent to manage your cashflow effectively.