Over a year ago, I wrote an article here in the Home Business blog about “Managing Cash Flow.” I thought it was time to revisit that important issue and talk about ways to look over your business operations and figure out what is going on with your cash flow and ways to make adjustments and/or improvements.
Just to share, my home business in 2 1/5 years old and I am just now getting my cash flow to an (almost) comfortable place. Managing the influx and out flux of revenue is a challenge for any business—whether it is a start-up or a mature business. Most of us are constantly looking at our budget and trying to make sure that the money coming in and the money going out do not put us in too much of a financial crunch.
My business is relatively simple. Managing cash flow for me has amounted to a combination of diversifying my income streams by expanding my client base and creating a system of budgeting, saving and managing family expenses that matches my business capacity. Periodically, I do have to look at things and evaluate whether or not I can take on more work and make more revenue, or if there are times of the month or year when things get stretched. I also need to look at future needs (with two kids starting college, what do I need to do with my business to be able to meet that challenge?) and see whether my existing cash flow can meet those needs or not.
Evaluating cash flow can be one of those things that we put off if we feel uncomfortable focusing on the money aspects of our home business. It can be tough to look at where we are lacking or try to come up with ways to bridge a gap. Still, it is important to have an accurate understanding of what is happening cash-flow wise in our businesses so that we can take the steps to make improvements.