Dylan Gallagher, finance

Prepare for the cash you will need

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In continuing with the theme from yesterday’s blog (click here) here are some ideas on how to prepare for the cash your business may need.  Keep in mind that one of the unique features of a small business is it’s ability to be nimble and change quickly.  Any plan for more than 12 months out could be nothing more than a guidepost in helping steer the overall strategy of a business.  At ground level, cash flow matters and having a plan for the coming business quarter or quarters can relieve pressure.

Here is a checklist of simple questions that you can ask to determine what cash will be needed and then formulate a plan for making sure that you can fund the answers that result from the questions:

– do we have any equipment or major purchases that need to be completed?

– do we have any new employees we are going to need?

– what are the “one time” expenses that are coming up that don’t fit in our monthly budget?

– what loan or credit balances do we want to pay off or pay down?

These types of questions begin to bring attention to some events that may need cash.  The next question becomes – how will our business pay for these items?  By keeping these questions and others like them at the front of your weekly or monthly planning and review sessions can be very helpful in beginning to move your business from “never have enough cash” to “we are starting to feel like we can catch our breath”

“What saves a man is to take a step. Then another step.” – C. S. Lewis

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