FAQ on Managing Small Business Cash Flows 

Many small business owners have a great many questions about the most beneficial management of cash flow. Some of the most commonly asked questions are shown below, along with answers provided by an expert on the subject.

What can I do when I just can’t secure credit to stay in business?
One possible solution would be to sell off on-hand inventory, and then use cash to purchase future inventory and services, until you are able to re-establish good credit.

What is the best way to calculate a break-even point for my business?
One good method is to create a spreadsheet which shows all income sources from sales for every day, week, and month throughout the entire year, as well as all expenses for those same time periods. There are templates online which you can use for this specific purpose.

How can I get clients to pay on time so I don’t struggle so much with cash flow?

One of the best ways of encouraging quicker payments is to offer your customers a discount for cash on delivery, or net 10 days. For those customers who don’t take advantage of your generous terms, you might try calling each one personally, and offering to accept a charge over the phone.

I’d like to establish a cash flow projection for future periods – what is the best way to do that?
There is a cash flow template available from SCORE, which covers a 12-month cash flow projection. There are others as well, but this is one of the best you can use.

I’m just opening my own small café – what should I do to avoid over-buying my startup inventory?
A good rule of thumb is to purchase the least amount of inventory that you can initially, but be sure that you can get your inventory shipped in promptly, so you don’t experience shortages and have to turn away customers.

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