Small business owners juggle many roles throughout their day. A continuous, insatiable roller coaster of activities; delegate responsibilities, prioritize task, schedule appointments, follow up, and follow through to stay afloat daily.
At times in our busy-ness, operations can be overlooked creating leaks in a system that ooze out cash flow. Ignore these leaks and your profits may erupt into a full fledged hemorrhage. To stop cash flow from leaking, create structures to tighten up your processes you are able to continuously maintain. Here are 5 tips stop money leaking from your business.
Make Cash Flow your highest priority
Sales are vanity, profits are sanity, but cash is reality. Author Unknown
Cash flow is what keeps your doors open and should be the highest priority for any business enterprise. Pinpoint and keep track of your cash flow
- Have a separate business account from your personal
- Keep business deposit separate from personal account
- Only withdraw payments of transactions related to your business
- Review monthly business bank statement for transactions for deposits, withdrawals, and payments matching your receipts.
Eliminate or reduce processes
Remember the rule, less is best. Simplifying your processes will eliminate gaps from appearing. Carve out extra steps to streamline systems to become more efficient and effective. Remove unnecessary steps, without compromising the end result, will speed up production and eliminate or at least reduce gaps from oozing in your operations.
Collect Receivables on a Timely Fashion
Good organization is the driving force to keep your receivables low and drive up revenues. Better to show on a financial statement high cash flow and low receivables. Develop solid systems and processes to follow for tracking payments to receive in a timely fashion. For delinquent payments have a set amount of time often increments of 30 days, 60 days, and 90 days. An example is a three step process
- Contact by phone or email a friendly reminder of payment
- A letter explaining the late payment
- As a last resort contract a collection agency to handle payments
Work on your business by delegating task
For a business to change and grow the owner needs to step back and take an objective view what is working and what needs to change or completely removed. One of the best ways to achieve a clear viewpoint is to delegate out responsibilities. An efficient business maximizes money making opportunities by eliminating wasteful practices and delegates task to the right skill set. Delegate task you do not have the time, desire or the ability to do yourself. The type of task you keep putting off but know they need to be done.
It’s all in the details
The difference between something good and something great is attention to detail. Charles R. Swindoll
The details are the finishing touches that polishes up every task. Details showcase all the minute features and exhibits your expertise. When you take the time to add a splash of detail, it separates out the bland to the exceptional. Your customers will take notice and appreciate the special touches you created for them.
A promissory handshake is not the same as receiving the actual payment in cash, cheque, or credit. Be diligent in watching where money is oozing from your business operations. The correct procedures and processes will safeguard you from money slipping away. The stress and emotional strain of these burdening distractions gone will be replaced with a vibrant energy to discover new business venture and boost profits.