How to Help Your Business Grow Through Effective Cash Flow Management
Americans are starting small businesses in record numbers. They’re following their passions, gaining independence and improving their work-life balance along the way. Whether you’re new to this journey or have been at it for a while, managing your cash flow may help you achieve your goals.
Are you ready for a cash flow management checkup for your small business? Follow these tips to help stay on track.
Create a realistic budget
It might be tempting to let budgeting fall by the wayside when you’re just starting out or you’re flush with cash, but creating a budget can be an important strategy for achieving long-term success. Documenting income, expenses and financial goals may help you identify areas where cutting spending or increasing revenue makes sense.
To keep your budget realistic, carefully review past quarters to make more informed decisions about the future. Or if you’re brand new, research typical costs and revenue in your industry. Then continually revisit your budget and adjust it as you grow.
Map out your expenses
Expense tracking can be a key component of your small business budget. Keeping a detailed record of your expenses helps you create a history to inform your projections. Include both fixed expenses like rent and payroll, as well as variable expenses like travel and inventory. Keeping track of your expenses can help you determine the best way to utilize your revenue stream.
Have a contingency plan
Life is full of unexpected events, and when they pop up you may benefit from having a contingency plan in place. Pandemics, natural disasters and cyberattacks all have the potential to disrupt your business and threaten its operational resilience and stability.
For business continuity and peace of mind, identify the main risks to your business, then list the steps you would take to deal with them and share those plans with your team.
Use financial tools and services that are easy to understand and free
Once you determine your business needs, look for apps and services that streamline budgeting, expense tracking and other important tasks.
Leverage the insight that data-driven analytics can provide to help you make decisions
Consider a secure service like Kabbage Insights, a free and powerful analytics tool that helps small businesses make financial decisions more quickly and confidently.
Kabbage Insights lets you view information from all your linked business accounts in one place.