A client recently mentioned that she was finding cash flow a bit tight. This is a common situation in small business.
When it happens to you, here are three tips that work for business
Avoid temptation
It’s tempting to use GST and Tax money to help keep your business afloat. We know people do this, but it’s not a great way to go.
Regardless of what you’ve done in the past, you can make a change NOW that will really help the future be brighter.
Here’s what we recommended to our client:
Starting now, every time you receive payment from a customer, put aside 10% of each amount received into a second bank account for GST.
Transfer your PAYG and Super into the same account each pay day.
These two simple steps will mean you know you have money put aside for when the BAS is due.
Set targets
When money is tight, people are often focused on surviving. You might feel like you don’t have the energy or inclination to look ahead.
But targets and taking the steps to move towards them really does help you out of a slump. At first this might seem daunting (especially when money is tight) - but a plan for how you'll secure your break even each month will give you certainty. It will also get your mind thinking about how you'll achieve the target.
For most businesses, this takes less than an hour to do.
Get help with accountability
Accountability (done right) works!
Most of us have a hard time sticking to our good intentions. That’s where it helps to have someone to encourage you keep up the good work.
When business is a bit tough and you really need to stay focused, a weekly check in is the way to go. At least for a few weeks while you get over the hump.
This might be a quick email report against targets, and a short call (no more than 15 minutes). It really does work wonders to take the time to report in and talk through things once a week.
We’ve allocated an hour a month to do this with our client.
If you’d like help with this aspect of your business please let us know.