cash flow management

Is cash flow management a problem? perhaps accepting prepayments could be an option

Is cash flow management a problem for your small business? Having enough cash to pay suppliers when due is a common issue, especially in times of

a cash flow management a problem

growth when you could be building up inventories. In her article No substitute for cash in the till, Dianne Buckner shares one company’s success with accepting prepayments as part of their business model and strategy for cash flow management. A problem no more for MacMarr, here’s what they have achieved.

Is cash flow management a problem? perhaps accepting prepayments could be an option

“Guitars are the whole basis of our business,” says Marr. “We can’t have a day when a bill is due from one of our suppliers and say, ‘Sorry, I don’t have the money.’ No guitars means no sales — and that would mean no company, real fast.”

But after a customer offered to pre-pay for his guitar purchase, even though the delivery was months away, Marr found himself thinking “I hope there’s a lot more customers out there who think like that.”

He and MacKenzie promptly put a notice on their website, promoting pre-payment in exchange for free delivery. Normally customers pay $35 for delivery anywhere in Canada. The response to the new offer was so positive, that Marr now estimates 25 per cent of their clientele pay up front. The strategy turned MacKenzie and Marr’s cash-flow problem into a solution. [Read more…]

There must be something happening in the universe. No sooner had I written 2 posts at entry level on small business cashflow than I found this great article written by David Bracken in the UK stressing the importance of not overlooking cash flow management. Now I know I am not a lone wolf howling into the wind. In fact I consider this so important that I have reproduced nearly all of the article below.

Small Business Management – Cashflow

Successful entrepreneurs usually concentrate their efforts on three key areas: vision, people and cash. Much advice and attention is lavished on the exciting work of developing and articulating a vision for the business: the grand strategies for world domination, or on ideas for hiring, managing and motivating a great team. The boring numbers bit about managing cash-flow too often takes a back-seat. However, to succeed in business, you must first avoid failure, and all businesses fail in exactly the same way: they run out of cash.

By having an accurate forecast, you will be able to judge your expenditure carefully, manage your working capital and seek additional funding in good time. [Read more…]