…I know…..not a very sexy topic, but important!
1/ ALWAYS KNOW YOUR CASH POSITION
Have a Cash Flow Spreadsheet that keeps you across:
Here is a link with several cash flow templates witheasy to understand instructions on how to create a useful cash flow report.
I always like to do the cash flow myself as it is a “pulse” on the business and a clear indicator of exactly how much cash you have to run your business in the short term.
2/ DON’T BE TOO QUICK TO SPEND
3/ REMEMBER YOU KNOW BEST
Many tech tools can now be bought month to month and are being improved all the time, so instead of going all out in the beginning, especially if you’re not an expert in that area start small, you can always upgrade.
If a sales person is advising you need X, make sure you ask them why and dig into the detail as this will also help uncover more information to help you decide what you do or don’t need. In my experience, most of the time you don’t need what they are convinced you do. This is because their view often lacks the depth of understanding of your business that you are privy too and what it needs across the board.
4/ PAY YOUR BILLS ON TIME
5/ BE ON TOP OF YOUR DEBTORS
6/ BUILD AND THEN, (AND ONLY THEN) FILL
Max out your resources and then scale up. In the early days of my first recruitment business I moved from a shared office space where there was no money wasted on excess rent to an office that could seat 10 recruiters (because I had great plans of expansion – of course!) Dumb move. By then there were only 4 of us in the business so I was paying almost triple what I needed to in rent without being able to justify it with revenue. My justification was, of course, that I would recruit quickly and fill the space – oh dear bit naive. We ended up subletting until we grew and a year or so later were on track but that was a lot of hassle and what would have been a lot smarter would have been to keep subletting until we had more recruiters to justify an office.
7/ DON’T “BUY” TOP BILLERS INTO YOUR BUSINESS
If recruiters are that good they will be more motivated by great bonuses. Don’t be tempted to overpay people, it will come back and bite you on the tarhootie.
Pay people a fair salary, give them a great place to work, all the tools and support they need to be successful and pay them a great commission. Less risk and a win for both of you. Ultimately this enables you to pay better people more and incentives them to stay.I’m normally a very positive person who likes to focus on what is possible, so debt to me is a “yawn” topic, but the reality is cash is the fuel for your business and if you don’t give it the attention it deserves you can come unstuck – and fast.
Please don’t think the sentiment of this email is not to invest or take calculated risks, that certainly isn’t my intention and by the very nature of being an entrepreneur you will most likely do this anyway. Just be mindful there is always someone or something you can spend your money on, just make sure any risks you take are calculated.Have a great week and thanks for reading!