Master Your Business by Mastering Cash Flow
I can’t stress enough how important cash flow is.
You need to have that cash coming in on point at the second the transaction’s complete. There’s none of this: ‘yeah I’ll fix you up when I get paid’ or sending them a 7- or 14-day invoice. That’s dead.
Do not do that to yourself. It’s setting up the whole industry standard of pay the tradie whenever you get a chance – he’s fine. That’s dead. If you were to do some research, you’d find out that there’s a billion (possibly a trillion) dollar empire out there of money that’s owed to small businesses like yours.
It should be in your bank account. You’re not a bank. If that customer was to loan that money to someone, they’d be getting charged 12 or 14% interest on that. What are you charging them? Nothing. If anything, you’re going backwards.
Do not loan people money. Get the payments on the day, straight away. Inject that cash into your system. Then the next step after this is to start to drag out your payment terms – so your aged payables. You don’t want to have to pay suppliers for 30 days if you can secure a 45- or 60-day account. That is gold.
Your business will just explode with cash. And with all that cash coming into the bank, you can start to make decisions about crucial things – like bringing in a manager, purchasing an office if you need one, and purchasing all sorts of things that are going to come back tenfold.
The number one thing that I would purchase is leads! Get leads coming in. Spend that cash on marketing (e.g. facebook advertising). Don’t do this off your own bat. There is some serious art to it. Hit me up and I’ll show you how. Let’s grow this business.