Build A Cash Pool For Your Home-Based Business By Following 7 Simple Rules
Although your income statement might show a healthy profit, it doesn’t amount to a hill of beans if you have no cash flow.
One of the biggest mistakes made by new home business owners is allowing clients and customers to buy now and pay later. In other words, extending credit.
Credit is for banks and large corporations, not for you as a home-based entrepreneur.
Cash flow is the lifeblood of your business.
Without it, your business will wither and die regardless of how many sales you’ve made or how much money is owed to you.
Cash flow represents the amount of money coming in to your business through services rendered and products sold, and money going out to cover expenses and production costs.
Your primary responsibility as a home-based business owner is to ensure the flow is consistent with more money coming in than going out so a pool starts to form to hold the overflow.
This overflow is what allows you to make early payments so you can benefit from vendor discounts, to take advantage of special deals, capitalize on newfound opportunities, and easily cover unexpected emergencies.
As soon as cash flow fails to produce the surplus funds you need, challenges arise and stress and overwhelm quickly follow.
Integrate these seven simple rules to your operating strategies and enjoy the benefits of a steadily growing cash pool.
1. Request payment prior to delivering your product or service. If your service is delivered over an extended period of time and asking for a one-time payment in advance isn’t realistic, divide the payment into segments and request payment in advance of each new time frame.
For example, if you provide weekly house cleaning, consider requesting payment at the beginning of each month in advance of providing your services – or suggest three or six months payment in advance and offer a discount as an incentive. A mere 10 percent discount over a three-month period could put an extra $100 or more into your client’s pocket. Many will jump at that deal.
2. Pay every bill on time to avoid late payment charges and earlier only if special payment discounts apply.
As a hair stylist working primarily with cancer patients, imagine spending one thousand dollars a month on wigs. If the supplier offers 2/10, net 30 as payment terms, you will save two percent by paying your invoice within ten days. That might only be $20, but over a year, it adds up to $240.
Take advantage of this incentive with every supplier that offers it and you could keep thousands of dollars in your business that you would otherwise have spent.
3. Deposit payments as soon as you receive them. Instead of making one or two trips to the bank each month, make them daily or weekly. Letting checks lie around increases the risk of loss. Also, go to a teller when making your deposit. Using an ATM machine removes any evidence you deposited real cash or checks. An employee or technical error or internal theft could create problems you simply don’t need.
4. Use a business credit card whenever possible for travel, meals, and minor expenses. This leaves more cash in your hands and defers payment. Using a card that awards travel miles also helps you cut future travel costs. I’ve enjoyed cruises and free flights to business conferences thanks to air miles.
5. Create continuity sales. Build a product or service into your business that your client could use on a continual basis. For example, if you run a bookkeeping business and your clients struggle with cash flow, recommend bank reconciliation services every month.
Many clients hand a box of receipts to their bookkeeper at the end of each year and cross their fingers hoping they did well. Helping your clients understand exactly where they are each and every month is an exceptional service that many will jump at. One client at $30 a month would give you $360. Ten clients at the same amount, paid in advance would give you $3,600 cash at the start of the year.
6. Create something that allows you to do the work once, but profit from over and over again. For example, many of today’s business owners are creating e-books (electronic books) and audio recordings sharing valuable tips, information and knowledge that improve the health, happiness and prosperity of others.
Selling electronic products online removes production costs and provides a steady flow of funds into your business.
7. Invest your overflow. Once you have built a comfortable overflow, consider investing some of it to make it grow even faster for you. Letting a large sum of money sit in your bank account does nothing to accelerate growth. Talk to an investment professional and find out how you can make that money work for you.
Start with these seven simple rules and get creative. Brainstorm ideas for special offers, continuity programs, passive revenue streams and investment possibilities.
Get input from professionals, mastermind members and your coach. You can do it. They can help.
2007 © Laurie Hayes - The HBB Source
Build A Cash Pool For Your HomeBased Business By Following 7 Simple Rules - To learn more about this author, visit Laurie Hayes's Website.
Like this article? Share it with your friends
![]() | |
| |
No article feedback found. |
| |
Leave Your Feedback |
|
| |
| |||
|
I've created this section on my site to share some of the incredible tools that I've used to build my business. I hope you too can benefit from them and look forward to hearing your feedback on the reviews! - Visit Evan Carmichael's Website |
|||
Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
|||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
Dianne CramptonDianne Crampton is an executive leadership coach, team consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. - Visit Dianne Crampton's Website |
|||
David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
![]() | |
![]()
| |
![]() | |
|
| |
![]() | |
|
| |
![]() | ||
|
| ||
![]() |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
![]() |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
![]() |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
![]() |
|
|
![]() | ||
|
Write The PR
Press Release Builder | ||
|
Guide To ERP Software
Business Management Software | ||
![]() | ||
![]() | ||||
| ||||
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
|
|
|
|
| ||||||||||
|
| ||||||||||












Subscribe to Laurie's articles











