Cash Flow Rules That All First-Time Startup Owners Need to Know

Cash Flow Rules That All First-Time Startup Owners Need to Know

Cash Flow Rules

Cash Flow Rules That All First-Time Startup Owners Need to Know

This is a head start for all the first-time business owners need to know, the cash flow rules. How cool it is that we will tell you these rules so that you don’t go around banging your head into the wall and not accomplishing anything. Getting paid is not a problem for the business, it is the when that counts. There can be bills that were skipped by the other companies or private users that owe you money, and there comes the problem. That’s why here we have the basic and most important 3 Cash Flow Rules that every first time business owner should know:

  1. It pays to be proactive too

Having a cash reserve or a funding company is good when you have a lumpy cash flow so that you don’t get caught up in the cash flow crisis. When you are most vulnerable don’t go around and searching for a solution for the crisis. This is the time that the sharks will take advantage from you and you will end up in a worst situation than before. Grocery shopping when hungry is the same thing, just don’t do it.

  1. Consider the ROI of financing, not costs alone

Financing is looking better and better in the crisis and it is the best idea to take. Delaying a payroll will bring down the moral of the employees and it will cost you more than taking a short term financing from a bank. You can always return the money to the bank when the employees are happy and working, but nothing can bring the trust in the people who work for you.

  1. Know your options

Having a backup plan is the best one of the cash flow rules and you cannot go wrong with it. Find a financing before the crisis strike so you will be secured at all times. Knowing your options is a good way for growing the business, here are three more:

                       1.     Offer a vendor discount

Offer the clients a discount if they pay for the service before the due date. This is great way to take the money even before the due date and everybody wants a discount on their bill.

                       2.     Get a business line of credit.

This option will allow you to draw money when a crisis strike or when you are having a hard time getting paid for your services.

                       3.     Use invoice factoring

It is the same as the business line of credit except that it will be tied to specific invoices and you will always be free to draw money when a need for it strikes.

The cash flow problem can be devastating for a small business, that’s why every new owner should take note of these cash flow rules and take care of his business.

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