Managing a company's cash flow is vital for small business owners to have a way of funding operations. I attended a workshop this morning sponsored by SCORE LA, the Pasadena Chamber of Commerce (Pasadena, California) and the City of Pasadena.
The presenter highlighted the cash flow cycle using a mock company that sells water heaters:
Quicker collection of accounts receivable
offer discounts to billed customers
Factor your accounts receivable
Get longer terms from your suppliers -- never stop negotiating.
Control your expenses--never stop evaluating and negotiating
Control your inventory
He gave an example of enhancing cash flow that included strategy to pay less rent to the landlord. Let's say you know your landlord might have vacancies in your building or other buildings. Your lease is scheduled to end in several months. You go to your landlord and ask to reduce rent from $ 1.50 per square foot to $ 1.25 per square foot. However, you offer to extend your lease for two years.
If you want a sample spreadsheet for your small business, contact accountant Jackie David at Your Back Office Web.com and request one. Mention Don Simkovich of Running a Small Business sent you.
This is your new blog post. Click here and start typing, or drag in elements from the top bar.