Your cashflow matters. It's the lifeblood of your business, and there is nothing more important than understanding it and correctly managing it. But for a business owner, cashflow can be a point of stress, someething that keeps you up all night when you wish you were focusing on almost anything else.
The reality is that you need to take it seriously, but you also need to take a step back and re-examine both it and the way you have structured your business around it. At Charltons, we have a wealth of experience in helping business owners to manage their cashflow; here's a few questions that we encourage business owners to ask themselves.
1. How much are you really bringing in?
This one seems like a no-brainer; but you'd be surprised how many business owners don't have a clear grasp of all their incomings, across all products. The reasons behind this vary, but every business owner has their own strengths and weaknesses, which means that every business owner has different levels of understanding around the hard numbers of their company. Once you've sat down with your accountant and talked through your entire cashflow, you'll have a better idea of your business' strengths and weaknesses. That's a big win!
2. What are your profits and revenue
Remember, those are two very different things. You need to not only be aware of what your incomings are but also aware of how much is really profit and how much is being spent on overheads and on maintaining your business. While it might seem from first glance that your business is extremely healthy due to a high rate of revenue, that doesn't necessarily mean that things are swimming along. To really have an understanding of your cashflow, you have to know exactly what you're spending and what you're spending it on.
3. What are your biggest liabilities?
There are always parts of every business that cost more, take more time and yet either don't bring in much money or regularly cause a loss. These are your cashflow liabilities, and they can endanger your business. By learning about your cashflow, profits and revenue, you'll be able to look for these liabilities and come up with a plan around how to solve the issues or make some important changes!
4. What are your biggest assets?
As well as your liabilities, another big priority is understanding what your cashflow assets are. There are going to be products and services that bring in more money than others, and these are the reasons your business is succeeding. When you can identify what they are and gather data around them, you'll be able to capitalise on their success and build out new options, products and growth strategies. You might try reading this post for an idea of how important it is to fully grasp your cashflow assets if you want to grow your business!
5. Do you have the right partners to improve and build on your cashflow?
One of the biggest mistakes that a business can make is not choosing partners and advisors who can truly contribute to their growth and direction. When you're looking for an accounting firm for an accounting provider, you need to find professionals who view your company not as a dollar sign - but as a long term partner that they can work and grow with. At Charltons, we specialise in developing that level of partnership with our clients, and by helping them plan around and improve their cashflow, we have helped thousands of businesses in Sydney move towards lasting success!
Charltons are one of Sydney's leading accountants, offering expertise in a range of different areas. We've helped thousands of businesses grow and become long term successes, and we have a vast amount of knowledge around business success. If you're interested in developing a growth plan, understanding how technology can help you grow and developing a bright future, we are waiting to hear from you!
