Nothing makes a business fail more quickly than a lack of cashflow.
It doesn’t matter how good an idea is, it doesn’t matter how many people want it, if the money flows out too fast one end and doesn’t come in quick enough the other the business will fail.

Many new Entrepreneurs tend more towards ‘Big Picture’ thinking than focusing on nitty gritty cashfow, but you can’t achieve business success without both working together – one is the heart and soul if you like, the other the lifeblood.

So what are the key points to remember for healthy business cashflow?

• Minimise outgoings – start from home if you can, buy secondhand; swap skills; do your research before buying; don’t borrow more than you need; use a good accountant.

• Maximise income – charge in advance; invoice quickly and with a short payment date; charge for late payments; give discounts for early payments; operate strict credit control.

• Choose the right clients – make sure your clients can afford your services and to pay on time and in full, so choose the right niche and run credit checks on them; ask for references; sack bad payers. Clients who don’t pay are not clients.

• Spread the load – why pay in full for something upfront if you can pay in installments?

• Don’t be your clients’ banking facility – even their bank will charge them for credit, so why should you give it to them for free?

by Bev James