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Business Money Management: It's All About Cash Flow, Cash Flow, Cash FlowLet's face it. It is a dog eat dog world out there for small and medium-sized businesses. Having a rock solid business money management plan in place is one of the best ways to ensure your survival. In any case, the point is always to monitor your cash flow. Every business has different advertising, raw material, equipment, space, and personnel needs. That is why a customized business money management system makes sense. Only you will know what that will look like after reading the information on this page. But first, let's talk about the need to simplify. According to T. Harv Eker in his book Speedwealth: How to Make a Million In Your Own Business in 3 Years or Less, any business should consist of only three parts: Marketing; Production; Administration He says, "Your system must be organized, it must produce a profit, and it must support rapid growth." Based on this advice, we recommend the following formula: *Note: Home and part-time businesses would use a different formula. Overhead would include everything from salaries, including your own, rent, utilities, office furniture, office supplies, postage, and anything else you need to run your business. A
bottom-up budgeting
strategy may be utilized in determining expenditures in this all-important area if your organization has more than five employees. After you pay yourself, those funds become you personal finances and are managed according to the
home/personal money management system.
Investment capital funds can be used to purchase new equipment, research and development for new products, and to grow your business nest egg through a balanced portfolio. In the future, we hope to be able to offer more guidance in this area of business money management. Advertising can take the form of building a web site for your business which generates free organic traffic or purchasing ad space on the radio, television, print, or on the internet. There are many ways in which to diversify your advertising (recommended), but by all means, do keep track of what is being spent and how well it is or is not working. Utilize split-testing with all of your ads to maximize cost effectiveness. Also, explore avenues in which investing one time will yield ongoing advertising rights, such as a membership which includes free advertising for life . If, after a doing cost-analysis, something is not performing well, kick it to the curb! Employee training and development is an important part of any business money management plan, but is often over-looked. It does not have to be limited to on-the-job training, nor does it have to be limited to your employees. New skills will only create more value in your business. There are many offerings available for yourself and your staff in the areas of personal and business growth. Charitable donations are those which benefit a cause outside of the business. The nice thing about these is that not only are they tax-deductible, but they also pay dividends by offering some kind of promotion in exchange for your contributions. For instance, let's say your construction company decided to sponsor a little league baseball team. Guess whose business name will be printed on all of their uniforms? Your business will get all kinds of recognition once its name begins appearing on posters, T-shirts, billboards, cross advertisement, and even tv and radio spots. Definitely the win-win in business money management. Return From Business Money Management to Smart Money Management
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