What is Cash Flow?
It's the movement of money in and out of your business. Profit ≠ Cash Flow. You can be "profitable" on paper (sent lots of invoices) but "insolvent" in reality (no cash in bank to pay rent).
Top Tips for Positive Cash Flow
- Invoice Immediately: Don't wait until the end of the month.
- Offer Early Payment Discounts: "2% off if paid in 10 days" works wonders.
- Request Deposits: Ask for 50% upfront for large projects.
- Extend Payables: Negotiate Net 30/60 terms with your suppliers.
- Lease, Don't Buy: Keep cash reserves for emergencies.
- Monitor Expenses: Cut recurring subscriptions you don't use.
- Forecast: Look 3 months ahead. Will you have a shortfall?