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Friday, November 16, 2012

Steps To A Successful Cash Flow Management

Creating a sound business plan including your purpose, goals, structure, market analysis and a cash flow analysis should be a smart move. ;) Then, update it every 90 days.

Create a cash flow calendar and identify what you need to earn every 30 days. It should include tracking how much income (coming in) and how much expenses (going out) you have. It helps to install accounting software on your pc such as Quickbooks Pro.

Most banks are hesitant to lend money for start-ups and some would prefer to lend entrepreneurs who have at least more than 2-3 years of experience who can show growth through financial statements and business tax returns. So, be your own banker and try to put together at least 12 months of savings to cover operational expenses.

Never borrow more credit than what you can afford to repay. Loans and credit cards will become problematic if you don't have any realistic cash flow accounting system that leaves you with enough money to cover your business expenses.

Before deciding to buy a business purchase, ask yourself how important it is, and be a "spare room tycoon". Work from your home office instead of renting a fancy office space.