Here are the 10 Rules to help you gain control over your cash flow so that you can create the business you have always dreamed of:
1. Never Run Out of Cash
Running out of cash is the definition of failure in business. Make the commitment to do what it takes so it does not happen to you.
2. Cash is King
It is important to recognize that cash is what keeps your business
alive. Manage it with the care and attention it deserves. It is very
unforgiving if you do not.
3. Know the Cash Balance Right Now
What is your cash balance right now? It is absolutely critical that you know exactly what your cash balance is. Even the most intelligent and experienced person will fail if they are making decisions using inaccurate or incomplete cash balances. That is the reason why business failures are not limited to amateurs or people new to the business world.
4. Do Today’s Work Today
The key to keeping an accurate cash balance in your accounting system is to do today’s work today. When you follow this practice, you will have the numbers you need, when you need them.
5. Either You do the Work or Have Someone Else Do It.
These are the only two choices you have. The work must be done. Like mowing the lawn, you can not ignore it. Someone has to do it. That means either you, or you have someone else do it.
6. Do Not Manage From the Bank Balance
The bank balance and the cash balance are two different animals. Rarely will the two ever be the same. Do not make the mistake of confusing them.
It is futile (and frustrating) to attempt to manage your cash flow using the bank balance. It is a prescription for failure. You reconcile your bank balance. You don’t manage from it.
7. Know What You Expect the Cash Balance to be Six Months from Now
What do you expect your cash balance to be six months from now? This one question will transform the way you manage your business.
This question really gets to the heart of the whether you are managing the business, or the business is managing you.
8. Cash Flow Problems Do not Just Happen
You would be shocked and amazed at the number of businesses that fail because the owner did not see a cash flow problem in time to do something about it.
The key, again, is to be able to answer the question: what do I expect my cash balance to be six months from now.
9. You Absolutely, Positively, Must Have Cash Flow Projections
Cash Flow projections are the key to making wise and profitable business decisions. They give you the answer to the all important question from Rule #7.
10. Eliminate Your Cash Flow Worries So You Are Free to Do What You Do Best (ie) Take Care of Your Customers and Make More Money
Use these 10 Rules to free yourself from cash flow worries. That way you can focus all your time and talents where you can Make More Money.
These rules represent a recipe for success and wealth creation. Written by Phil Campbell, author of Never Run out of Cash, placed here for informational purposes only.