If your cash flow is negative, you may find yourself unable to pay your employees and suppliers, cover your monthly rent and have the money needed for any other daily business costs.įor these reasons and more, you should always prioritize cash flow strategies in your business planning. If your cash flow is positive, you’ll know you’re earning more money than you’re spending, and you’ll have cash on hand to cover payroll, equipment purchases and upgrades, loan repayments and other key business needs. Why is cash flow important to a small business?Ĭash flow is important to a small business because it shows how much money is actually moving in and out of your company, not how much money you’re awaiting from accounts receivable. To combat this struggle and stabilize your cash flow, you can incorporate several tactics into your business model.Įditor’s note: Need financing for your business? Fill out the below questionnaire to have our vendor partners contact you with free information. Nearly one-third of those surveyed are unable to pay vendors, loans, themselves or their employees because of cash flow issues. Managing cash flow can be one of the biggest challenges business owners face.Ī recent study from Intuit found that 61% of small businesses around the world struggle with cash flow. Proper cash flow management is a key strategy that every business owner must master for long-term financial success.
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