Click to rate this post!
[Total: 0 Your Rating: 0]You must sign in to vote
Business owners are no strangers to responsibility. Of all the tasks on their plate, one of the most important is making sure their company maintains a healthy cash flow. There are several important parts to this. First and foremost, you need to understand how to recognize healthy cash flow. The primary (but not sole) indicator of this is whether or not you’re making a profit. Your company should be bringing in more money than you spend. If this isn’t the case, your first step is either increasing profits or cutting costs — both of which come with their own set of challenges.
Another good indicator of healthy cash flow is making sure your business growth is funded by your business’s activities, rather than external funding. Although it’s fine to turn to loans and other forms of financing periodically throughout your business’s lifetime, the majority of your growth must be self-funded in order to build a sustainable business model.
Crowdfunding Finder takes a look at some of the tools and techniques you can use to ensure your business’s financial health is on the right track:
Use the Right Bank Account
When it comes to healthy cash flow, one of the best gifts you can give yourself is a strong foundation. In this case, that means finding the best bank account for your business’s needs. Search for a full-featured account that puts more of your business tasks in a single place. For example, some of the best small business bank accounts can sync up with payroll software, making payments faster and easier while allowing you to track revenue streams.
You should also take interest rates into account. Remember, when you keep your money in a particular bank, that account is effectively a type of loan. Banks compete for that privilege through interest rates, so search for one with a high-yield interest rate in order to get the most bang for your buck. The right bank account gives you the power to use your money well without a ton of hassle or fees, so do your research and compare options to find the best one for your needs.
Save with Intent
As mentioned above, one of the clearest indicators that your business is healthy financially is that you’re funding your own growth. However, many business owners don’t really start thinking about growth until they’re ready to get started. As a result, they don’t have the money set aside to make it happen. This leads to growth funded by outside sources of financing and puts your business in a more precarious position.
Avoid this by creating dedicated savings categories with future growth and expansion in mind. Doing the research ahead of time to figure out how much, say, opening a second location will cost can empower you to start putting money toward that goal early. That way, when the day comes around, you won’t have to scramble for financing — you’ll have done that work already by planning ahead.
Be Picky About Expenses
Finally, make sure you’re being extremely choosy about how you spend your money. Save where you can; for instance, you can use Adobe’s free online flyer maker to help with advertising and connect with customers. Also, it’s very much worth your time to look into crowdfunding, since that can be an enormous asset to your business.
This isn’t to say you have to go with the cheapest option at all times, but you should make sure that if you’re paying more for a product, material, or service, the price point is truly worth it. Take some time to evaluate the cost’s return on investment. Does this expense improve your product enough to justifiably raise your prices? Do customers respond to that price point favorably, or are you losing business? Can you sustain this expense without losing money in the long run?
These questions can help you evaluate your spending to make sure it’s actually working for, not against, your business. Don’t let optimism distract you from the evidence that’s in front of you. If a particular investment isn’t working, it’s time to re-evaluate and possibly go another way. Your business health depends on finding ways to make sure your cash is flowing in the right direction. Put in the research, and don’t be afraid to make hard choices: they’re often the most likely to pay off in the long run.
Written by Michael Stephenson
Crowdfunding Finder is a team with extensive experience on security investments. We have been evaluating transactions and acquisitions, conducting research, and analyzing key startups and small businesses for the past decade. Let us guide you on the path to success.
You can see our crowdfunding equity campaign on https://wefunder.com/crowdfundingfinder