Small businesses exist to make money. But they wonâ€™t be as profitable as they can be if the business owners arenâ€™t managing their cash flow effectively.
Most first-time business owners will, at some point, need some help managing and improving their cash flow. And if their bank is on hand to provide that assistance, so much the better â€“ if problems can be resolved, itâ€™s a win-win situation.
It might not be a first-time business owner either â€“ banks are also likely to be approached by those experience in business whoâ€™ve completed a cash flow forecast and have realised theyâ€™re going to need the bankâ€™s assistance.
This blog, however, is aimed at providing some handy tips for helping inexperienced business owners manage their cash flow.
One of the first things to check is if people understand their cash cycles. If they donâ€™t have a grip on the ebb and flow of cash in and out of their business, then Job #1 is to help them understand how their cash flow cycle works. In fact, you might be surprised at how much someoneâ€™s cash flow improves just by helping them get to grips with it.
Novice business owners can benefit from getting assistance with:
If theyâ€™ve never performed a cash-flow forecast before, sit them down and help them with their first attempt. If youâ€™ve got relevant tools and calculators on your website that can facilitate a forecast, point them in that direction.
Help them to understand that a being able to forecast cash flow accurately is one of the most effective ways to manage their cash flow, and is an essential business skill.