I was tempted to title this post “Cash Really is Queen.” It’s an obvious play on the old business adage “Cash is King”, but by and large my client base is filled with women entrepreneurs and I prefer to honor my audience. But here’s the thing, when it comes to your business – cash is bigger than King or Queen. Cash is a Royal Flush!! It’s the best hand you can be dealt in the game of business.
In preparation for the Let It FLOW! 10-Day Cash Flow Challenge that starts Tuesday, July 5th, I want to begin with a short primer on what cash flow really is. During the 10-day challenge, participants will dive deep into the problems that poor cash flow creates and will receive daily action steps to take to help clear those issues, so cash will flow freely in your business and so you can keep more of it at the end of every month, quarter and year.
If you want to sign up for the Let It FLOW 10-Day Cash Flow Challenge, you can so by clicking HERE.
Just what is cash flow? Let’s start with what cash flow is “not.” Many business owners, both experienced and inexperienced alike, think cash flow is the same thing as profit. Cash flow and profit are two different things. For example, you can have a lot of profit yet still experience tight cash flow.
Think of your business like you do your very own body. In your body, there are vital organs that must work together to ensure everything is running smoothly and efficiently. Cash flow in your business operates very similarly to blood flow in your body. If your blood isn’t flowing properly and feeding the organs and limbs that need it, your body begins to operate inefficiently, and you may get sick or shut down completely.
Cash flow is the inflow and outflow of cash in your business. When we refer to cash, we mean monies coming in or going out of your business regardless of whether it’s via cash, check or bank drafts. Your customers may pay you with their credit cards, but that money still flows into your business for you to use to keep the business going.
Cash is the lifeblood of your business. Maintaining a proper cash flow ensures that you not only bill your customers but also that you collect payment in a timely manner to then have enough money to pay your expenses as they come due.
Warning: Your bank balance DOES NOT necessarily equal the amount of actual cash you have!
Be very careful that you don’t take a look at your bank balance and think that it matches the amount of cash you have available. You might have checks that haven’t yet cleared the bank or deposits that haven’t posted. There might be pending electronic debits/withdrawals that need to post to your account. Bottom line, don’t make the mistake that many business owners do and try to run your business from the balance you see on the screen when you log into your online bank account.
How do you ensure a healthy cash flow?
- Garbage In/Garbage Out: Make sure the data you feed on is good data. (Know your numbers!)
- Exercise is Vital: Knowledge is key and exercising that knowledge is like strength training for your business!
- Get Adequate Rest: Just like our bodies need rest to help us rejuvenate & recharge, our businesses need the same type of rebuilding periods. Every business has busy and slow seasons: the “slow season” is prime time for rebuilding and rejuvenating!
- Get a Checkup: We go to the doctor when we’re sick but also to help avoid illness and maintain proper health. We should do the same in our businesses. Don’t wait to get professional help until your business is in trouble. Establish a relationship with someone you trust. It’ll help minimize the little emergencies in business.
I want to help you ensure you have a healthy cash flow that will lead you to a strong, sustainable business. Join me for the ‘Let It FLOW!’ 10-Day Cash Flow Challenge that starts this week. Each day, you’ll receive an email directly to your inbox that will give you both the knowledge and support you need to heal your cash flow woes. Just visit http://bit.ly/cashflowchallenge to sign up today!
Kemberli Stephenson is The Pr
ofit Sherpa & works with emerging women entrepreneurs and small business owner and helps those who are looking to impact their bottom line, increase profit margins and grow a successful business. Kemberli empowers women, specifically women entrepreneurs, to be financially independent by teaching them to discover their danger zones and blind spots, and develop and implement profit strategies that will grow as their organizations grow. Follow her @ProfitSherpa on all social media channels.