Cash flow is probably the single most important component of your financial well-being because if you don’t have it, you’re stuck.
Especially for small businesses, maintain consistent cash flow can be difficult. And failing to maintain consistent cash flow can be deadly.
For those providing lessons or activities of some sort to children, business is typically quite seasonal – which means that your income from tuition has peaks and valleys. Because of this simple fact, it is very important for you to understand what you must have every month, what the minimum you may bring in at both your peak and valley times so you can ensure that funds are always there to meet your monthly commitments.
Don’t miss the article we’ve linked to among INC. Magazine’s many great Better Business items. INC. taps experts in various areas of business practices to share the lessons they’ve learned with you – their peers in the business world.
Cash Flow ‘What Ifs’?” by BMO Harris (Small Business Banker). Please read the complete article at the link provided.
The areas of focus for creating “what if” scenarios may depend to some extent on the type of business, but common ones include spikes/dips in revenues, unexpected/uncontrollable increases in expenses, slow pay by large customers, seasonality, and expanding/contracting personnel needs.