This Article is brought to you by Arthur D. Levy, CPA of The RoArt Group
Recently, I received a call from a business owner who was bemoaning his fate, unhappy with his customers and generally complaining about his business.
What was his problem? From his point of view “everything.” In reality he was struggling with lack of money stemming from poor cash flow ….which is what we all see as the first sign of trouble in any business.
After all, while some of us have esoteric or a high moral reason for being in business, for a majority of us it’s MONEY!
Cash Is King! Business survival is based on cash flow. You need to control it, manage it and handle it with care. The success and very survival of your business is dependent on planning and control.
I meet with the business owners regularly and discuss a few basic ground rules about money. The following are strategies to help control their cash;
- Do a credit check on new customers – don’t assume you will get paid
- Check references, call banks, check D&B
- Clearly spell out the terms of the sale in writing
- Be sure to get deposits on all orders
- Be sure all paperwork is correct – POs, invoices, shipping docs, bank a/c info.
- Consider getting paid electronically rather than snail mail
- Consider offering discounts for early or advance payments
- Drop clients who are not profitable – In the long run they are more work and cost you more money
Go on offense and overcome your biggest business challenge: CASH FLOW!
Cash Flow – Cutting Costs
- Negotiate better proceeds from vendors – Shop vendors
- Go paperless
- Cut tasks rather than cut employees
- Use electronic communication
- Shop insurance costs – Negotiate everything
- Increase salaries based on performance
- Review overhead – Office supplies, merchant processing, coffee etc – Don’t be wasteful
Review your business plan regularly and if you don’t have one – it’s imperative that you write one!
Think outside the box!
If you would like a complimentary copy of our e-book, How To Control Cash Flow
Email rosann@theroartgroup.com and we will be happy to send it to you.
Arthur D. Levy, CPA and Rosann Levy are principals of the The RoArt Group, LLC. The RoArt Group, helps restaurateurs, small, midsize, & family owned businesses create strategies to increase profits and “grow” their business. www.theroartgroup.com