Cashflow is the lifeblood of every single business. So here are some of the biggest and most common cashflow mistakes. Enjoy…
Cashflow Mistake Number 1
I once had a client ask me to finance their cashflow because their clients were not paying on time, apparently it as all down to late payment. For the client this was a cashflow issue.
The biggest mistake here was that the client wanted to finance their cashflow. It was not a finance need, the need was to get better at debtor collection. If their debt collection did not improve then anything they did would fail.
Mistake number one is trying to finance cashflow without addressing the cause.
Cashflow Mistake Number 2
Even when the client has addressed the cause of the cashflow problem, or that there is a genuine need to finance cashflow there is too often one big mistake.
Seeking finance when you need it.
The worst time to seek finance is when you need it. The best time is when you don’t need it. This begs the question of
“How do I know I need to finance my cashflow, and more importantly how do I know when I will need it?”
This quote is very common. It also answers itself. If you don’t know when you will need to finance cashflow then nobody else will. Remember that the more desperate you are for business finance the less likely you will be to get it.
To get cashflow finance you need to show you know what you are doing, that means getting a grip of what is going on, or as I like to call it ‘control, control, control’.
Mistake number two is asking for finance when you need it.
More Cashflow Mistakes
There are a few more big mistakes, but the above are by far the two most common. Get them right and you should be half way there.
To help further there is a short cashflow video below, take a look as it covers the above in a 60 second video. The next time you hear a business owner complain about cashflow then send the video to them!
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By Dave Farmer