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Manage Your Money as You Grow Your Business

7 tips to help you keep your eye on the cash

by ParentPreneur  |  1328 views  |  0 comments  |        Rate this now! 

When I first started out in business, I imagined my biggest challenge would be making money. Fortunately, for me, that wasn’t the case. By listening to my customers needs and responding with products and services to meet those demands, I was able to pass that test. It wasn’t easy. But I can still remember how I felt when I received our first check. I had made it and now I could take a deep breath -- or so I thought.

What I didn’t realize was that my challenges had only just begun. Managing the cash flow, and keeping my own cash for as long as possible, turned out to be as challenging as making the money to begin with.

Through the years, I discovered several lessons – some of them hard-learned – about how to manage cash in a growing business. Here's what I learned: My seven secrets to managing your cash as you grow

your business.

1.) Keep your overhead low. When you start making money, it is tempting to go out and spend it. Be careful -- growth takes money. By keeping you’re your fixed costs (or burn rate) low, you will be better positioned to weather the ups and downs inherent in business growth. Forgo the Class A office space unless your business requires it, and save your money to invest in things that will fuel your growth.

2.) Never pay a bill early. Many small business owners, especially first-timers, take pride in being able

to pay a bill before it is due and wrongly believe it will improve their credit rating. But what they are actually doing is giving someone else unearned use of their cash. Unless there is a discount for early payment, resist the urge and hang on to your money as long as possible.

3.) Barter for what your business needs. Trading your goods or services for other products or services has two purposes: it gets you what you need for your business, and it allows you to retain your cash. Be creative in what you can get for no money; I have a friend who bartered some of her time for two years of rent-free, fully-stocked lab space.

4.) Negotiate slow payment terms with your suppliers. Try to get your payments pushed out as far as possible. Don’t pay a subcontractor weekly if your client is paying you monthly. Sometimes, this is difficult to negotiate, especially if your subs are small, too. However, many service providers whom you would not expect – lawyers, accountants, etc. – are willing to let you stretch out payments to them if you just ask. They know you are starting up, and if you can convince them you’ll stay with them when you start to grow, they may be willing to take a chance on you.

About the Author

A successful entrepreneur & mom of 2, Julie grew her biz to multi-millions in revenues while raising her family. She now helps other women to do the same. Visit www.JulieLenzerKirk.com to learn more.

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