How To Improve Cashflow As A Small Business

Two key focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. While the focus of a business is the generate profit, a key aspect of that is controlling costs and improving cashflow. The following contributed post is entitled, How To Improve Cashflow As A Small Business.

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One of the problems facing small businesses, even profitable small businesses is cash flow or lack thereof. Having a steady cash flow is important for all businesses as it is the means to meeting all overheads such as rent and bills. If payments are due to be made but cannot be met even a successful company could run into difficulty and uncertainty over their future. Here are some tips to consider when it comes to keeping your company cash available.

Photo credit Pixabay from Pexels

Lease instead of buy

Choosing to lease over purchasing property or even equipment and goods may at first seem counterintuitive as commonly you will end up paying a higher amount over the duration of the lease than you would if you bought the property outright. While this may be the case outlying large sums of money into property or goods will tie up your company funds and could have a very detrimental effect on its access to cash and cash flow. It may also be that your lease agreements can benefit from certain tax advantages, advice on which should always be sought.

Liquidate assets

If you do choose to buy your goods or equipment then you will always have the option to sell them to liquidize those assets. Or, it may be that you have surplus inventory to your requirements that you can dispose of to increase your cash flow. Take a look around, and consider whether everything you have is truly needed. Your company tools or equipment will always be worth something and there are specialized companies available who can help value your stock and offer you competitive rates. If you are in the restaurant trade for example take a look at this site to see what services they offer for liquidating your inventory.

Stay on top of invoicing

It sounds like an obvious one but you would be surprised how many companies lag behind when it comes to invoicing. Firstly be sure to invoice as soon as possible and make sure all invoices are clear and easy to read with all of the relevant information easy to find. Relevant information such as payment terms and payment methods should be top priority. It is also a good idea to include a due date and to make it visible from several locations on the invoice. Finally be sure to chase unpaid invoices regularly. Set yourself weekly or even bi-weekly reminders to send out follow ups as the payment deadline approaches. If an invoice is unpaid after the due date be sure to charge late payment fees.

Consider how people pay you

If your cash is coming from your customers, which it will be, consider the payment methods you offer and whether you can expand these. There are so many viable payment options available from Paypal, Venmo, Apple Pay or even Bitcoin. The more possibilities you have and the more convenient it is for customers to pay you the quicker you will receive your money and improve your cash flow.

3 Sure Fire Ways To Save Your Business Cash

Two focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. If you’re running a business, your goal is not only to generate cash, but also to save cash where you can so that you can generate as much profit as possible. The following contributed post is entitled, 3 Sure Fire Ways To Save Your Business Cash.

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Pixabay – CC0 License

As you enter the throes of a global pandemic, your business will undoubtedly suffer. Footfall in the high street is at an all-time low, you will find that your loyal customers are more hesitant to part with their cash, and your overheads are looking precarious. You need to think quickly to stem the outgoings and increase the income of your venture. This is difficult in a time of international crisis as you may need to shift business models swiftly. Follow this guide to discover three sure fire ways to save your business cash.

Supply Chain

If you are a venture that relies on importing components from other areas of the world, your supply chain may have been disrupted because of Covid-19. This could play to your advantage and give you the leverage to renegotiate a better deal financially for your imports. You need a reliable freight carrier that will ensure that you receive what you need on time to fill orders. Don’t simply opt for the cheapest supplier out there if the reviews are appalling. Consider the door to door services of an ocean freight carrier as seen at These specialists will utilize their transport and logistics links to deliver your components direct to you from your supplier. Shipping container transport also allows you to buy in bulk to negate the potential disruptions your supply chain may face in the future.


While you may not wish to let any staff members go from your venture, this is often one of the only ways to ensure that your startup survives. While your orders remain low and you struggle to maintain a buoyant cash flow, you may need to make redundancies. This will save your business cash in the short term. However, you will also need to consider the hole that a staff member will leave. The work that they were responsible for will still need to be done and you will need to rely more on the staff members that you keep on payroll. This can result in low morale and a lack of motivation. Outsourcing is a possibility but you will need to be careful with your money to remain in the black.

Remote Working

More businesses than ever are having to resort to remote working as described at This may lead to your heightened anxieties because you fear the lack of productivity from your staff when they have the option of watching Netflix shows all day. However, giving them the responsibility and freedom to work remotely can be empowering. Morale can increase and productivity can become more fruitful. Allowing working from home can also save you money as your largest overhead – the office lease – can be negated. By going wholly remote, you are welcoming in the future of twenty first century working. Google and Apple are already embracing this business model, so you should too in order to save your business cash.

A global pandemic is unprecedented in modern times. Follow this guide and save your business money to help your venture survive.

Is There Power in Budgeting Your Money?

“You want to account for everything you spend and always keep your receipts son!”

An Important But Not a New Principle

Note. Like my Compounding Interest and Net Worth pieces, the subject matter of this blog post is not new. It has been known for years by those who’ve learned about it in their families, learned about its concepts in business school, or who have discovered it on their own. It’s a discussion from my personal perspective which I think is worth visiting. In the spirit of the first principle of my blog, Creating Ecosystems of Success, I’m simply introducing a concept and discussing why it’s important for the lay person, so they can make their own life choices.

As described in my piece entitled, I still don’t have a car in 2018, a good friend recommended that I craft something regarding budgeting. That piece described a key budgetary decision I made several years ago to fortify my financial future. In that piece I highlighted several financial vocabulary words which are pertinent to budgeting including: Assets, Cash Flow, Liabilities and Minimalism. In this piece, I’ll get down into the actual ‘nuts and bolts’ of budgeting.

“You know I always stay within my budget, honey,” my Auntie Adeline said to me on numerous occasions throughout our lives. Of my Aunts and Uncles, Auntie Adeline was always the most vigilant about staying within her budget and messing with her budget was literally playing with your life! Mom was also wise with her money and budgeted.

Accounting for Your Dollars and Cents

“You want to account for everything you spend and always keep your receipts son!” Dad was also very particular about his money and was very meticulous about where every dollar went. Though not formally trained in budgeting, I got the sense from many relatives that keeping track of where my dollars went was important. I started budgeting in my mid- to late-twenties though not effectively as I’ll describe later.

Simply put, a budget is a means of numerically accounting for tracking the money you earn and how much you spend every month. As described in earlier pieces, I have considerable experience with Dave Ramsey’s Financial Peace University (FPU). In it, Dave refers to a budget simply as a ‘Cash Flow Plan’ where you’re telling your money what to do and where to go. I’m going to come back to Dave, but first I’m going to tell you about one of my experiences.

A Tedious Task?

“I don’t keep a budget and I don’t have the patience to do so every month!” These words were typed by someone who’ll remain anonymous in one of my text groups. A regular budgeter now myself, I came very close to challenging his position, but I decided that it wasn’t worth it. From experience it’s not wise to argue with people who have taken staunch positions on things to try to get them to see your point of view. Sometimes it’s best to just let them be and let them figure it out on their own, if at all.

What this person’s comments showed was that while budgeting is important, there’s a negative view of it for some. In fact, in Trish Reske’s article entitled, How Many Americans Use a Budget?, she cites data from a 2017 study by U.S. Bank which found that 41% of Americans said they used a budget while whopping and 59% said they did not. That number was up from data reported by Gallup in 2013 which stated that only 32% of Americans used a budget.

Again, a budget is simply a written plan where you’re telling your money where you want it to go and what to do. You’re looking at what’s coming in and what’s going out and trying to figure out what’s leftover, if anything. What are the two skills you need for this important exercise? You need something we all learned in the first or second grade; the ability to add and subtract. You also need discipline and the abilities to think, and to sit and plan. There are other things you can do to aid in your budgeting process. For example, if you believe purchasing recyclable food packaging will help you save money in the long-term – they can be cleaned out and used multiple times – then you should include this within your strategy.

Simple Addition, Subtraction and Restraint

Okay, get ready for the magic. Specifically, you want to look at your monthly income and subtract your monthly expenses from it. If you’re working a 40-hour work week, this should be relatively simple. If you get paid weekly, you should get four paychecks every month and if you get paid bi-weekly, you’ll get roughly two pay checks a month. The Federal Government has 26 pay periods a year, so there are two months when employees get paid three times. How long is a check good for? Well that depends on how you budget your money.

Your income is your ‘Net Pay’ – your pay after all your deductions and retirement savings have come out – that’s if you’re saving into your retirement which is a different story, and one which Nadine Terman Solstein Capital could potentially help with, if you’re interested in investments. Underneath that number you want to list out your monthly expenses. The difference between your income and your expenses is called your ‘Cash Flow’, and that’s the money you have left to spend in any way you see fit. This sounds straightforward right? Well actually it depends.

Your income is your ‘Net Pay’ – your pay after all your deductions and retirement savings have come out – that’s if you’re saving into your retirement which is a different story. Underneath that number you want to list out your monthly expenses. The difference between your income and your expenses is called your ‘Cash Flow’, and that’s the money you have left to spend in any way you see fit. This sounds straightforward right? Well actually it depends.

Budget Surpluses and Deficits

This is a good place to introduce two new vocabulary words; “Surplus” and “Deficit” – concepts I recall first hearing about from Presidents Bill Clinton, and then later argued about by Al Gore and George W. Bush as they battled for the 2000 Presidency. Financially when you run a Budgetary Surplus, you have money left over once all your expenses and obligations are paid for. This is where you want to be – your expenses being less than your income, and you want them to be as low as possible.

If you’re running a Budgetary Deficit, your expenses are exceeding your income. This is where you don’t want to be. Here you either must: make more money, cut your expenses, or borrow and go into debt to cover your expenses – the worst option of the three.

Of course, if you do end up in debt, it’s important to get out of it as soon as possible – and that is something that you should be able to do fairly easily as long as you approach this in the right way. The best way is usually to use a service that will help you to pay off the debt faster – look into some Jefferson Capital Systems reviews for an example – so that you can get back on your feet as soon as possible.

Second you need to know how much money you have coming in weekly and monthly and I think we all know that. The fun part is figuring out what your expenses are. If you don’t know where to start for your expenses, first think about what Dave Ramsey calls your ‘Four Walls’: clothing, food, shelter and transportation. These are your basics. Think about everything else after these four.

Creatures of Habit

If you’ve been swiping either your credit or debit cards, go to your online banking accounts and see what your averages are. My high school basketball coach always used to tell us that, “We are creatures of habit!” In this case you’ll probably find that there are trends and patterns in your spending – the amount of times you go to Starbucks and what you get there, the restaurants you frequent, the amount of gas you put in your car every week, etc. Some months such as November and December may take you out of your normal spending patterns so be aware of those unusual months or times of the year. The end of the summer is another noticeable time, as people like to take vacations.

Once you see what your averages are, ask yourself if there are ways you can cut back. Can you catch more sales? Can you bring your lunch to work? Do you absolutely need to upgrade your phone or your car along with everyone else? Are there discounts you can take advantage of (being a senior, being military, being a government employee, etc.)? Do you need to make more money at least temporarily to pay off excess debt, for example? These are all questions you should start asking yourself when doing your budget. This brings me to my next point.

If you haven’t been living on a budget, and want to start one, it helps to have goals in mind. Do you want to retire one day? Do you want to become financially free? Do you want to not have to hit your friends and relatives up for cash whenever you get into a jam? These are all questions you should ask yourself. Not having to ask friends and relatives for money ever again is a huge motivator for me.

The Benefits of Budgeting

I described this in my last financial blog post entitled, I still don’t have a car in 2018. There I described how I got rid of my car and held off on getting another one so that I could grow an Emergency Fund and get to the point where I could acquire some investments. I also wanted to make sure I’d have a chance to retire one day.

For at least a year, I thought about what I needed to do to be able to save 15% into my retirement account going forward. When I looked at my budget, I did the math and figured out how much money I’d have to save into my retirement account from my first and second paychecks of the month to consistently do it. I then looked at what I could cut from my expenses and my eyes focused on my Cable bill which, at the time, was a whopping $176 per month.

Think about that. That’s $2,112 per year – money that could’ve been ‘compounding’ somewhere. I finally got to the point where I was willing simply use an antenna signal and just kept my landline and internet access which came to $90 a month – that’s a 50% savings which gave me the extra money to save into my retirement account. It felt strange at first, but it was very necessary, and I was okay watching Star Trek reruns every night.

Three Budgeting Points

I’m going to close with three points from Dave Ramsey because I’ve helped teach Financial Peace University and know it well. The first is the ‘Zero-Based Budget’. The key tenet of this term is, “giving every dollar a name.” That is, if you’ve done your budget and you have money left over, you should assign it a name like “Extra Discretionary Spending” or “Money For The Next Check” – don’t just leave it there because it will get spent on something random.

Consider using cash for at least some of your purchases – “Discretionary Spending” and “Eating Out” for example are two categories I use. Using cash may be scary at first as our world has become digital to the point where we pull out plastic and swipe everything using credit and debit cards. The problem with that is that you don’t ‘feel’ the money leaving your possession and are more likely to spend – businesses know this and bet on it. Using cash helps you feel the transaction, but it’s also the fact that its finite, and it exerts more control over your budget and overall spending.

Lastly, as Dave points out in the budgeting lesson, it takes about three months or so to get into a rhythm to the point where you’re budgeting effectively. The first couple of months aren’t going to be very good, but if you stick in there, eventually you’ll start to roll. Keep in mind your motivation for doing this. And lastly, once you get good at it and you’re able to use the budget to plan over a series of months, you’ll see some really great things happen in your life.

An Important Secret to Budgeting

Perhaps the most important point to make in all of this is that while you’re budgeting and working towards your goal, you must still allow yourself to have some fun. That’s going to vary depending upon you and your lifestyle. Whether it’s concerts, the movies, or if you have a restaurant you like, you can’t completely choke yourself off from pleasurable things because that’s not sustainable long-term – like dieting.

Earlier I briefly mentioned the concept of an Emergency Fund. I must mention this because these things all go together: budgeting, emergency savings, retirement savings, and investments. While this piece is about budgeting, having emergency savings is arguably the most critical component. It protects your budget when life’s inevitable and unforeseen emergencies come crashing into you – some by your doing and some not. Ideally you eventually want three to six months or more saved. How do you build your emergency savings? You budget for it!

Who should budget? Everyone should. There’s a saying out there that you should run your personal finances like a business and when you think about it, each of our households are mini-businesses where some are getting steadily wealthier and others are going further into the hole.
If you’re an entrepreneur and have a business idea, or you’ve already started your business, you should have a budget because the control of your capital and expenses are critical. Everyone should do it if even just to avoid paying the banks overdraft fees. According Julia Chang from Forbes, Americans paid $34 Billion to the banks in overdraft fees in 2017, and this is something the banks count on.

Budgetary Nerds and Free Spirits

One last important piece from FPU – maybe the most important. In the budgeting lesson Dave describes both budgetary ‘Nerds’ and ‘Free Spirits’. The former enjoys sitting down with the numbers and doing the budget while the other doesn’t and naturally lives with reckless abandon. I’m absolutely and proudly a Nerd and enjoy going over the numbers, making everything balance and doing the planning. If you’re a Free Spirit this might all seem unnatural for you, at least initially, and you may need someone’s guidance and encouragement. Ultimately, it goes back to your drivers and goals. What are you pushing for and how badly do you want it?

So that’s my take on budgeting. I hope you were able to get something beneficial from this. Again, there many, many financial writers and teachers and FPU is but one. It has worked well for me and I recommend it. However, for you someone else or something else might work better. I also enjoy reading Michelle Singletary’s work for example.  No matter who you learn it from though, the principles remain – you want to make smart and wise decisions with your money.

The Big Words LLC Newsletter

For the next phase of my writing journey, I’m starting a monthly newsletter for my writing and video content creation company, the Big Words LLC. In it, I plan to share inspirational words, pieces from this blog and my first blog, and select videos from my four YouTube channels. Finally, I will share updates for my book project The Engineers: A Western New York Basketball Story. Your personal information and privacy will be protected. Click this link and register using the sign-up button at the bottom of the announcement. If there is some issue signing up using the link provided, you can also email me at . Best Regards.

The Essential Guide To Honing Your Company Finances

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. A to running any business/enterprise is efficiently and properly managing its finances. The following contributed post is thus entitled; The Essential Guide To Honing Your Company Finances.

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Ask any entrepreneur what their biggest concern is when they are launching a startup, and the chances are that they will say their finances. The financial health of any business is crucial to its success. If you are just starting out along the road of self employment, it’s imperative that you get your monetary situation sorted out. There’s no point leaving your nine to five with excellent promotion prospects, a steady wage, and superb colleagues if you don’t have the financial readies to make your ideas practically viable.

Before you hand in your notice, you need to have constructed a business plan for your proposed venture. This needs to detail your sources of funding, your potential future investments, your cash flow projections, and your profit calculations. Going blindly into the world of entrepreneurship without financial certainty means your business will be doomed to failure.

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Funding Sources

If you are setting up a business that sees you working from home and with minimal overheads, the chances are you will not need to raise much capital. However, if you need to seek premises, you have to build up stock, or you are looking to import and supply products to consumers, you will need to source funding.

The number one port of call is usually the bank. Specialist business managers will assess your plan and listen to any presentation that you wish to give to convince them that your business is a worthwhile investment. Just because they are large corporations and you have been a loyal customer for a decade or more doesn’t mean that this is a sure fire source of investment. You need to dress smartly, know your figures like the back of your hand and enthuse them with your pitch.

The bank isn’t the sole source of funding in the twenty first century. With the advent of crowdfunding, sole traders from across the globe have one online platform in which to convince professional and amateur investors alike to claim a stake in their business. This is a novel and exciting way to raise capital. Hundreds if not thousands of people from across the planet could be investing in your business. This also allows your brand to claim a global reach that your bank manager simply doesn’t possess.

If you’re after expert advice and contacts as well as financial acumen, you might like to consider a business angel. These (not quite) celestial beings are experts in their fields and have made a small fortune using their business knowledge. They will have a ridiculous amount of guidance and advice to impart, and they are worth tapping into. If a business angel is willing to back your idea, this validates your business venture. To maximize your chances of gaining investment from a business angel, you must be passionate about your ideal and be ready to answer a variety of questions. The pitch will be more demanding than if you were presenting to a bank manager. Remember, a business angel is investing their own hard-earned cash, so they need to be certain of a return.

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Cash Flow

When your business is up and running, it’s important that you don’t attempt to run before you can walk. It’s vital that you build slowly and grow at a manageable rate. In principle, it sounds fantastic if a product was to garner a huge following and the appetite for it is almost insatiable. The orders will flood in. However, if you don’t have the cash flow to import the goods and distribute them, your supply chain can stall, you will have dozens of unhappy customers, your reputation will slide, and your business can fail.

To avoid this situation, you need to employ the best ecommerce for b2b by setting up a software package that can control the way your products are marketed to customers. From one platform, you can hide or show certain products or services to your customer base, giving you more control over your ecommerce website. From here, you can also set up the credit terms and analyze your accounts information. This interface is ideal for more complex business and financial needs.

When you set up your business, you are hungry for success, and rightly so. But you mustn’t allow your startup to become a victim of its own success. You must ensure that your business is always in a position to fulfill its obligations, by ensuring that your capital remains buoyant, your cash flow is healthy, and you have the finger on the pulse of your company finances at all times.