Home Cash Forecast

Positive Cash Flow is the Lifeblood of Your Business

There is nothing more important to your business than a positive cash flow. It's the lifeblood of your company. Without cash, failure is only a matter of time.

So your first priority in a business turnaround is to stop the bleeding. Reverse the drain on your capital, becoming cash positive as soon as possible.

I know at least 50 ways to squeeze more cash from a business, and if you subscribe to my upcoming newsletter I'll gladly send you the full list right away. To subscribe, see the panel at right.

Meanwhile here are some examples:

1. Cancel cell phones immediately. Most cost $200 or more monthly.
2. If you provide company cars, sell them. Pay car allowances if necessary.
3. Review your insurance policy, and cancel non-critical coverage.
4. Slash payroll costs, starting with your own paycheck. Chop it 10% or more.
5. Talk to your landlord and reduce your rent by 5% or more.

Some on the list are not as simple as these. But -- effective today -- your top priority is to build capital reserves and develop a weekly cash budget. You must receive more money than you spend. Period. Become a survivor, even an SOB if necessary.

When the demands of others seem urgent and their threats of collection or legal action come (and they will), protect yourself and your company -- no payments unless it’s in the budget.

The list above was concerned with cash-saving details. Now let's take a broader perspective as we reverse the cash drain and increase reserves. Your turnaround planning must address these areas:

• Sales Growth
• Expense Reduction
• Selling of Assets
• Management of Receivables (e.g., Consider offering discounts)
• Management of Payables (Don't be silent; request extended terms)
• Tax Review

I want you to know what you cash position and bank balance is on a daily basis. To help with that, click below for an easy-to-use Daily Cash Forecast plan, vital to any business's long term success.

Click to learn more about Improving Cash Flow.