How Well Are You Managing Your Cashflow?
Unsure about how well you are managing your cashflow? We are here to help you identify and overcome cashflow problems within your business.
Cash is like water. They can both go down the drain – but they both work best when they flow. Both can lead to the creation of riches, employment, life and vibrancy if well managed – even in tough times. However, when cash ceases to flow it’s likely to lead to a sick business in danger of terminal demise.
Understanding your cashflow
You’ll recognise when you have cashflow problems easily: you’re probably juggling who to pay and which payments you can afford to delay. Perhaps you’re not sure how you’re going to pay the wages next week and it’s likely that you’re having trouble sleeping soundly.
What causes cash flow problems?
There can be a number of reasons: inadequate sales, not enough margin, changes in customer behaviour – including Covid-19, lack of stock… The list goes on.
The cause isn’t always under your control, but it can usually be addressed. What’s more, it needs to be addressed – otherwise, the problem will repeat itself. But right now, don’t run out of cash or you won’t have the luxury of time to fix underlying problems.
What can I do?
There’s a lot you can do to help yourself quickly. You need prompt action to address the short-term cash position. You may need the support of your bank which you’ll gain by making them have confidence in you. You need a clear plan.
A simple guide to solving a cashflow problem includes these steps:
- Understand and accept the problem
- Establish what you need and when
- Get buy-in from your whole team
- Identify sources of funding
- Identify savings that don’t fundamentally undermine the business
- Plan for action (with professional help, if you don’t have the skills or resource)
Your next steps
Finance specialists at Ampios, in conjunction with the North & West Lancashire Chamber of Commerce, are providing a free Business Cashflow Webinar on Wednesday 2nd September 2020 at 10.30 a.m.
To put your business in a better situation, with a deeper understanding of the vital importance of cash and actions to take, book your place now.
Take a look at our other blogs about solving funding problems here.