small buisiness start up

Small Business Help – What is meant by cash flow

What is meant by cash flow? If you are new to business you may not understand some of the terminology or jargon often used by commentators of business and financial advisers. Here is a nice easy to understand definition of what is meant by cash flow.

Small Business Help – What is meant by Cash flow

Simply put, cash flow is the money coming in to a business as well as the money going out. This includes everything from sales dollars to expenditures for office supplies.

By understanding the true importance of cash flow, small business owners and entrepreneurs will be far more ahead of the game.

At the beginning of the cash flow cycle, nearly every business starts out with – you guessed it – cash. But from that point on, the central purpose of the business is to convert that cash into other kinds of assets or to extend it with liabilities and ultimately turn it back into cash again. Only this time, more cash than the business started with.

This process continues repeatedly throughout the life of a business.

The concept of cash flow can be defined in different manners. Cash flow is any kind of income or expenditure that affects the cash accounts. A cash flow must be strictly, financially liquid cash or finances that can be stored in a bank account or in the form of currency.

Cash flow can be broadly divided into two categories, inflow and outflow.

The cash inflow, or just cash flow, is generated as a result of financing and/or sales.

The cash outflow is a result of many factors such as purchases, investments, salaries and any other expenses.

Please leave a comment if you would like greater clarification on what is meant by cash flow. We will also cover why this is important in other articles.

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Here is an example of a cashflow budget

Small Business – Low Start Up Costs A Piece of the Puzzle

You have a great idea, you have done your homework and are ready to get going. It’s hard, but try & keep the reigns pulled in by keeping in mind low start up costs are going to you benefit you in the long term. If it will help use this as a mantra… do I need to spend this much on this item now, is there a less expensive alternative…It is not an exaggeration, with 50% off business not surviving one year in some parts of the world, this could be the difference between success and failure. What follows are some strategies for keeping low start up costs written by Jacob Cass.

Think About Your Office Space

….it is likely that you will be working out of a home-based office so this may not be a significant issue. Too many new business owners fall into the trap of spending too much money on the trappings of a luxury office. As per Mr. Morris, new business owners should use utilize extra space in their home, even the garage for as long as is feasible. Another possibility is to join a start-up incubator. An incubator is a great option for new entrepreneurs as these spaces typically provide access to a copier, scan, telephone and fax services. Not so incidental is that an incubator also permits you the opportunity to interact with other start-up business owners for support and camaraderie.

Consider Your Options for Computers / Equipment

…… it is is more than likely you will need a computer / laptop with a consistent Internet connection, along with software. The next step is to identify the least expensive option for purchasing these products. One idea for new business owners is to rent and lease a laptop rather than purchase, since this gives you the flexibility to change models as your business grows. Because a computer is essential to your business as a designer, do not shortchange yourself in this one regard. Also, remember there is no magic button.

Use Low-Cost Marketing Strategies

There are several low-cost strategies small business owners may employ to keep marketing costs down, especially with social media. Create a page on Twitter, Facebook and LinkedIn and engage prospects with status updates that pose questions or ask for feedback. Engage with your network. Join discussion groups or start a blog to become recognized as a thought leader in the field. Email can be used to promote special offers. Write an article or series of articles and submit to article directories or as guest postings on the sites of colleagues.

Even thought these tips been written for a freelancer or designer they can be applied to most businesses. Just keep in mind

… do I need to spend this much on this item now, is there a less expensive alternative….

low start up costs are a piece of the puzzle in building a sustainable business.

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