What's the one thing that business owners never talk about when I ask them to tell me about their business?
I don’t blame them. They didn’t start their business to manage cash. They started their business to do something they really enjoy and get paid for it – like create websites, sell real estate, practice law, do collision repair, or any of a million things that people enjoy doing to make money.
When I start working with a business that has a cash crunch and may not survive, I first work with the business owner’s mindset.
I help them understand that while managing their cash isn’t what they want to do, it will keep their business alive so they can do what they love to do. It allows them to spend more time and energy on what they love, but only after their cash management systems are in place.
Check out my article about 5 Key Mindsets.
Want to talk about managing cash in your business?
Then tell me, what's your biggest cash management...
The COVID-19 global pandemic is a wake-up call to ALL business owners to take responsibility for their company finances.
I posted that financial advisors are responsible for the companies they work with to have good financial plans, including a 13-week cash flow model. Now, I am putting the responsibility 100% onto business owners. There are no more excuses.
For too long business owners have said...
"It's not about the money, it's about the people."
"I do it for the love of my craft."
"Someone else can deal with the finances."
"I want to be my own boss, but so I decide that I only want basic bookkeeping."
Now a tiny virus has told you that you are wrong.
You are in business. Business is about the numbers.
Not only numbers, but if you don't have money, you can't...
...work your craft
...let someone else worry
...be your own boss
If you survive this downturn, fix your finances.
Start with a cash flow model that tells you how long you can survive. (Put "Cashflow" in the comments if you...
Cash flow management isn’t about money. It’s about getting your life back.
I’ve worked with business owners who were sick with concern, fear, and doubt about how they will make payroll, meet bank covenants, and literally keep the lights on. They've told me with tears in their eyes that they don't know if they can survive past another payroll. Their spouses express concern about the health and well-being of their partner.
By focusing on cash flow - when and where cash was coming and going from the business - they were able to turn around the business completely, or stay afloat long enough to sell the business.
And yes, some businesses fail, but it’s because of a fundamentally unsound and unsustainable business model.
If you or someone you know have good sales and margins, but are struggling to have the cash to pay the bills, get help.
Open up to someone who can integrate and monitor a cash flow model with your company’s financials and help you make decisions...
"Lenders prefer cash flow models, not just a profit and loss statement."
Businesses can only thrive when they have outstanding bookkeeping. Good bookkeeping is the basis of a systematic cash management program tailored to specific business needs. It also makes sure that the rest of the business is running smoothly because cash is available, and documentation is done correctly.
Without good bookkeeping a business will fail.
Don’t believe me? Here are the reasons that any business will fail without good bookkeeping:
I’ve shown this list to a few people and they think I’m being harsh. What do you think? Read my explanations and then decide…
A cash crisis is guaranteed
If a company...