When it comes to cash flow management, getting it right is critical to the success of any business. Without a clear picture of projected revenue and expenses, it’s almost impossible to manage risks, cover expenses and take advantage of opportunities. Here are the 4 most common cash flow mistakes to avoid at all costs!
1. Pricey, unnecessary ongoing expenses
When’s the last time you took a serious look at the cost of your overheads? Rent, utilities and other fixed costs do add up and could provide opportunities to save money. If you don’t have time to do the investigating yourself, ask your accountant to look into it for you. The savings potential may surprise you.
2. Winging it
Don’t have a budget? Umm, that could become problematic… A clear budget is necessary for anticipating issues and getting to know your seasonal business cycles. It’s also an important tool for determining what you can – or can’t – afford when it comes to purchasing new equipment, stock etc.
We have something that can make forecasting your incoming revenue and outgoing expenses a little easier, because, let’s be honest, this can be a tedious task! Download our easy to implement Cashflow Plan. This plan can help you achieve positive cash flow every month and avoid financial stress.
3. Buying things you don’t need
Impulse purchases… we all do it, it’s just so tempting. But poorly-researched buying decisions can see you burn through lots and lots of cash in a short period of time. Before you buy, stop, and think – will this purchase make a real difference to my business’ bottom line? If the answer is anything other than an emphatic Yes! then walk away, now!
4. Pretending everything’s OK
Whether you’re feeling overwhelmed by bills, tax debt or operating costs, the very worst thing you can do is ignore or neglect it. Pretending the problem isn’t there is not going to make it go away. By facing these matters head on, you are more likely to be met with understanding as you work together to resolve things.
Thousands of Australian small businesses require an additional cash flow injection each year. If you’re looking to take advantage of an opportunity or purchase new equipment, apply online for a small business loan today.