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Positive Cash Flow leads to success
| Guest post by: Rene Truter |
Article Overview: Ensuring a steady cashflow is essential to your company's success. Implementing effective controls over money coming in and money going out can help a business to generate substantial wealth.
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Free Download - Some pointers when choosing a business partner By Rene Truter |
Positive Cash Flow leads to success
In the current economic landscape, it comes as no surprise that business owners choose to adapt and change the focus of their business strategy. The starting point, is to realise and accept that the business environment has transformed and looks very different than a year ago.
The market may have changed, or shrunk, or the trend may now be different. How much research are you doingto stay on top of your game? The age-old statement "cash is king" has never been more true than it is now. Many businesses are profitable, but run out of money.
Managing your cash flow throughout the year can help to alleviate the pressure one feels around this time. This means you have to perform a cash flow analysis regularly and use cash flow forecasting to take preventative measures well ahead of any potential threats.
The following are examples of situations that may lead to cash flow problems and precautionary measures that can be implemented:
- Poor credit control: If you don't get paid on time, you will in turn default on your obligations. You can counter this by having strict credit policies in place, and not being afraid to refuse work from large enterprises
- Order fulfilment: If you don't deliver on time you will not get paid
- Plan your workload properly and only accept orders that you are capable of completing. Inform your customers in advance if you cannot deliver on time
- Ineffective marketing: This may result from ineffective use of marketing tools. Create a marketing strategy and plan to reach your customers effectively. Ensure your message is correct soyou don't attract the wrong kind of enquiries
- Poor cash controls: Having poor cash controls can be detrimental to your business, even if you think you have sufficient cash. Impose stringent controls on cash because it is an important survival tool
- Inefficient ordering systems: Systems should be user friendly and customers should be able to deal with you efficiently and not be subjected to complicated procedures
- Poor management accounting: Every business should be able to account for its activities. Proper record keeping leads to accurate accounting
- Inadequate supplier management: Suppliers might overcharge or take a long time to deliver stock. You need to create a system that will help you to manage your suppliers
- Poor controls of gross profits and/or overheads: Every business should develop its own pricing model and prepare budgets to ensure that overheads are kept within targets
Always remember that by building up a positive bank balance, youcan trade effectively and expand your business. Manage this positive bank balance to earn you good returns on your money. After all,entrepreneurs are in business to make money.
Copyright© 2010 Business Partners Ltd. All rights reserved. Related Articles
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Article Tags: cashflow, money, positive cash flow, small business
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About the Author: Rene Truter RSS for Rene's articles - Visit Rene's website The SME Toolkit is a project of the Small and Medium Enterprise Department of the World Bank Group and is available in multiple languages through local partners, such as South Africa, around the world. Business Partners Ltd, leading risk financing company for small and medium enterprises (SMEs), has made the online Toolkit available for all entrepreneurs in South Africa. The Toolkit is a joint initiative between Business Partners, the International Finance Corporation (IFC) and IBM, offers easy access to information, resources and online training relevant to SMEs in a large number of industries and business sectors. The SA SME toolkit provides how-to articles, business forms, financial tools, online training and information resources developed by leading experts, and free software tailor-made for SMEs. All aspects of business set-up and management are covered, from business planning to accounting, financial management, human resources, import /export, legal and insurance matters, marketing, sales, operations and information technology. The site also offers a range of self-assessment exercises and tools, aimed at enabling entrepreneurs to take control of problem-solving in their companies, and even to proactively implement strategies to avoid potential problems. Users have lauded the SME Toolkit as a one-stop shop for almost any piece of information needed to run their business. Register on the Toolkit today to start receiving the monthly newsletter and grow your business knowledge and skills. Click here to visit Rene's website   Successfully selling your product or service Protect your companys sensitive information Business Blues consider your risks What makes a good project manager Assessing your companys financial position |
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Improving Cash Flow
- How do I improving Cash Flow? What the best way to improve it to another 100% growth YOY?
Has anyone does this or achieved this using online marketing?
Thanks,
Roberts
Re: Improving Cash Flow
- Thanks for your information.
guide on how to avoid the problems of over trading. <-- Where is this guide? Any URL?
guide on debt factoring and invoice discounting: the basics. <-- Where is this guide? Any URL?
I just want to learn more about this. I am also looking for a good article on:
What exactly is Cash Flow?
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I think it is a problem of thinking and mind sets problem. If we can change the way of spending, we can have more Cash.
Robert
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- Positive thinking and a desire for success are fundamental qualities of an entrepreneur in my opinion.
Re: Conversion rates
- Great point Kevin, word-of-mouth is a great way to convert leads as they are being recommended by someone they trust. My job is converting website visitors into leads, and of the leads we get from the website/s we convert around a 12.5% (of leads). At this point I think our website is the best leads vehicle right now.
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I've been using the sites to generate leads for Foreclosure properties and I've been having some success.
One of my Business Coaching client is a software developer and he's been having a lot of success with Craigslist - almost $7000/month.
what's your view on it ?
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