You’ve heard this before haven’t you? When it comes down to starting a business or surviving as a business – cash is king. Do you and your team do all the tricks and tweaks needed to make enough profit to keep you alive? Think of it like your own health. When you are feeling healthy life is good. Cash is the health of your company. And, like your own health, there are steps you can take to make it better.

The most important document you can maintain is a cash flow projection. Think of it as a spreadsheet that shows what money you have, what you plan to spend this week, what you expect to get paid and how much you have at the end of the week. Project this out for the next 3 months, or longer if you know there is a big hit coming in September, a balloon payment or you have to move or the new computer system will be installed. There is a great article from Motley Fool if you want to go deeper.

Not only does it give you a reality check, it can give you peace of mind or the basis to go to the bank now to up your line of credit. Banks and investors love seeing this report. If you get heartburn looking at it, what can you and your team do to have more cash?

Start with your pricing model. Are you charging enough? Yes, it is hard to raise prices. Have you segmented your customers by profitability? Have you segmented them by volume? Do your biggest customers get the best pricing or are there a bunch of small ones that are getting unnecessary discounts? Do all those customers have the same sales person? Do you see where I am going with this?

There are a lot of small ways to make your company more profitable – which could lead to you sleeping better at night. Start with your cash flow projection and go from there.

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