Master Your Business Cashflow
© Photographer: Andres Rodriguez
Agency: Dreamstime.com

There is no denying that creating a budget can be tough, which is why so many businesses choose to ignore it altogether. Trying to decide where to start and which tools you need to get it done are a hassle that some would rather not face. Taking the time to learn how to budget will save you from all manner of potential headaches down the road, whilst also helping to make your business a more profitable venture.

If you ask the average business owner what there bank balance will be at the end of the month, most will have no clue. While that may sound a little scary, it’s the case for altogether too many businesses that don’t take time to prepare and use a cashflow budget.

The businesses that have the best financial success are almost always those that have strict control over how their money is spent and invested. An increase in cash flow usually leads to mortgages being paid down sooner, bills and invoices taken care of in a timely fashion, and more opportunity to invest in business growth.

Coming across extra cash in your business does not happen by accident. Yes, sitting down and making a list of every revenue and expense can be time consuming, but it is time that ends up being very well spent. Once you get over the initial hurdle of starting to break down the finances of your business, you will quickly see how money can be saved and earnings increased.

The ability to understand the finances of your business means being able to make smarter financial decisions as you move forward. Simply studying your revenues may help you see the opportunity for additional income streams that would otherwise never have become apparent. Breaking down the expenses will allow you to spot areas where you are spending too much and where cuts can be made. Small changes translate to big savings over time.

You need to grow your business in order to survive. Maintaining the status quo will allow your competitors to pass you by and leave you behind. Your cashflow budget allows you to minimise the financial risk of a major decision or change in your business by modelling the outcome. With a cashflow budget you can test the possible results on paper before you make the decision. By testing a number of new ideas in this way, you can separate the good from the bad and prevent your business from making costly mistakes.

If you are operating your business without a budget in place and you want to learn how to prepare a cashflow budget, then I recommend you download my Cash Is King eBook and master your Business Cashflow.