by
Philip Campbell, CPA
Copyright
2003, Philip Campbell - All Rights Reserved
I conducted a survey recently to determine the degree to
which small business owners have their cash flow under
control.
The survey results showed that only 20% of business owners
feel like they have the cash flow of their business under
control. That means 8 out of every 10 business owners are
trying to manage their business without having the financial
side of their business under control.
That's a recipe for disaster!
It's like riding along on the freeway in a driving rainstorm
and you discover that your windshield wipers won't work.
You can't see the cars in front of you or behind you. You
slow down to a crawl. You're just hoping and praying the
rain stops before you end up in a terrible accident.
In business, you need a clear view into the financial impact
of your business decisions so that you put the odds of
success in your favor. You have to take control of this
part of your business... or it will take control of you.
The
Small Business Financial Dilemma
The results of the survey highlight what I call The Small
Business Financial Dilemma.
It works like this.
As a small business owner you wear lots of hats. You are in
charge of Marketing, Operations, Customer Service,
Accounting, Finance, Administration, Human Resources and
everything else that must be done to run a successful
business.
After a while, some of the work that needs to be done is put
off. Often times it's the accounting and financial component of the business that is sacrificed.
A little time passes and you begin to notice you don't really know what's going on with the cash balance. You may
be looking at financial statements, but you are confused about what they are telling you about what's going on with
your cash balance.
The
Resulting Dilemma
Running a small business means you are always making
financial decisions and financial commitments. You are
making those financial commitments each day and in the back
of your mind you are asking yourself these questions:
"Can I really meet these financial commitments I'm making?"
"Am I going to have enough cash to run my business
properly?"
Slowly but surely, worry and uncertainty about your cash
begins to drag you down. You find yourself spending more
and more of your time fighting cash flow fires rather than
growing your business and taking care of customers.
The
Solution to the Problem
The secret to taking control of your cash flow is to ask
yourself two simple questions.
- What is my cash balance right now?
- What do I expect my cash balance to be six months from
now?
If you CAN'T answer these two questions, then strap yourself
in for a wild ride. You are on a roller coaster ride that's
about to become really frightening.
On the other hand, when you CAN answer these two questions,
you have just regained control of the financial side of your
business. You will experience the almost magical feeling of
control that comes from mastering this critical part of your
business.
You will feel like I did back in 1991 when I first discovered the secret to taking control of the cash flow of
any business. I was amazed how simple the solution was and how it transformed the way I managed the business from that point forward.
Never
Run Out of Cash
Remember, it's all about the cash. If the cash ever runs
out, then everything you worked so hard for goes right down
the toilet. That's why the financial side of business is so
crucial to your success.
Take the time to ask and answer the two critical cash flow
questions each month.
By taking control of your cash flow, you are putting the
odds of success in your favor. You are doing your part to
avoid becoming a small business failure statistic.
You are making sure you have the financial information you
need so you Never Run Out of Cash.
About Philip Campbell
Philip Campbell is a CPA and the author of the book: “NEVER RUN OUT OF CASH,
The 10 Cash Flow Rules You Can't Afford to Ignore”.
Philip has helped hundreds of business owners take
control of their cash flow.
He shows you how to eliminate your cash flow worries and
take control of your business.
Is your cash flow under control? You
can download his new Special Report "The
Secret to Creating Cash Flow Projections You Can Trust"
FREE Right Now. Click
Here to get your copy NOW.
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