How to Avoid Cash Flow Problems
By Ivy Lamb, Manta Webinar Editor — September 21, 2016
A savings plan will prevent your business from getting squeezed between slow-paying customers and overdue bills.
Positive or negative cash flow can be the difference between success and failure as a small business owner. After all, it doesn’t matter if you’re close to getting a big payment from a customer if you need the money now. But a little bit of planning can help you avoid these panicked moments.
First, recognize that certain times will be slower than others for your small business. “Despite all of your marketing efforts, your cash flow will still be slower in some seasons,” said Lisa Chu, owner of Black n Bianco Kids Apparel in El Monte, California. “Learning your market and industry will help you maintain a healthy cash flow during the slow seasons.”
Next, Chu recommends that you start saving. Set aside at least two to three months’ worth of operating expenses as soon as you can. Much like a personal emergency fund, that money will help your small business survive any unforeseen financial challenges.
Lastly, don’t ever “set and forget” your budget. Things change often, “so it’s wise to regularly revisit your budget on a monthly basis,” Chu said.
To learn more about building a financially healthy business, attend the free Manta Experts webinar, “Smart Money Management for Small Business Owners.”
This story originally appeared here on Manta.com.