Truth be told, the first time I encountered the term "Cash Flow" was in a half day workshop on the topic. At the time, the material went over my head. It was a case of receiving information when I wasn't ready for it.
As adults, we have this unique way of learning - we don't pay too much attention to the topic unless it pertains to us.
At the time, I had no cash flowing in either direction. I was in the early stages of business trying to figure out how to get a client. I was a little green and I'm certain that everyone except me could tell.
Fast forward a few years and I find myself in a new position - with the plunge into "bricks and mortar" suddenly cash flow becomes an urgent and pressing topic. I definitely had a timing issue when it came to cash flow. There was a lack of synchronicity between when bills needed to be paid and when I would be paid for services delivered. I was at that WTF moment.
I was immediately reminded of a quote one of my sages was fond of using "Cash is like blood; run out of either and you're dead."
Many businesses fail early for a number of reasons. One being that there is no market. I did not want to be the person who failed at business because of lack of skills around cash flow.
I dug out those books and they offered some good tips for planning and projections but there are some lessons that can only learned where the rubber hits the road.
Here are my favorite tips on the topic of cash flow.
1. Plan - have financial projections, do a budget or whatever you choose to call it. Map out the next year.
2. Don't be an ostrich - I like to keep my finger on the pulse. I'm all about the soft landing. Most of us do not enjoy that part of business but the reality is developing this habit early can save you from trouble later on.
3. Develop good relationships. I pride myself on being a good paymaster and I develop good relationships with people that I owe money to. Because of this relationship, I was able to ask the landlord to hold onto a check for a couple of days when funds were low. We had built trust into the relationship.
4. Become an excellent communicator. There's nothing worse than someone who uses passive aggressive tendencies when it comes to money. You can't get blood from a turnip and you can't get money when there is none. People know that. They're a lot more forgiving if you're not dodging phone calls.
Keep in mind that cash is king. Keep it front of mind and keep it flowing.
Cash Flow Workshop