How to Manage Cash Flow | Solving Cash Flow Problems

Manage Cash Flow

Solving Cash Flow Problems for UK Small Business Owners

Cash flow is the lifeblood of any business. It’s important to keep track of your income and expenses so you can effectively manage cash flow and ensure the success of your business. But what do you do when those cash flows are low? Here are some tips on how to manage cash flow problems and make sure your business stays afloat.


1. Determine your Break-even Point

The first step in solving cash flow issues is understanding how much money you need to stay in the black. To do this, you need to determine your break-even point. This is the point at which your total expenses equal your total income, meaning you’re able to cover all costs without making a profit or loss. Once you know this number, it will help you understand where you need to adjust your spending or increase sales in order to stay profitable.


2. Generate More Income

If your income isn’t enough to cover all of your costs, then it might be time to start looking for ways to generate more income to manage cash flow. This could mean increasing prices, selling more products or services, offering discounts or promotions, or seeking out new customers and markets. You could also consider taking on additional freelance work or investing in other sources of passive income such as stocks and bonds.


3. Manage Your Expenses

It’s also important that you keep an eye on your expenses and make sure they don’t exceed what comes in to manage cash flow. Take a hard look at where all of your money is going and see if there are any areas where you can cut back or eliminate altogether (e.g., cancelling subscriptions). Additionally, look into ways that you can save money such as switching suppliers, negotiating better rates with vendors, using cheaper shipping options, etc.                                                                                                                        

Cash flow management is essential for any small business owner looking to succeed in today's market. Taking the time now to understand how much money comes in and goes out each month will help set up a successful financial future for yourself and your business down the road. By determining where adjustments can be made—whether that means generating more income through sales or promotions, cutting back on unnecessary expenses, or finding alternative sources of funding—you can ensure that cash flow never becomes an issue for your business again!

About the Author

Annette Ferguson 

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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