Cash Flow Management Tips-Small Business Corner

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Cash flow management tips-Small Business Corner

Positive cash flow is so important in small business. With a healthy cash flow, you can pay your debts on time, sustain your operations and continue to grow your business. Without it, your small business could potentially be only a few steps away from financial collapse.

The overall goal of cash flow management is to keep you in the “green,” also known as positive cash flow, where you have more money coming in than going out. Managing your financials well is important if you want to keep your business afloat, but it is even more crucial if you have plans of growing and expanding your small business. It can also help you predict and plan for cash shortages and surpluses.

Have an emergency fund

Small businesses should always have emergency cash reserves. Just as with your personal finances, a good rule of thumb is to have enough to cover at least three to six months worth of expenses.


Incentives and promotions are a great way to boost sales quickly. Cleaning out your inventory can really help kick-start a healthy cash flow for your small business.

Seasonal budgets

Annual budgets may not always be the most effective for all small businesses. Depending on the nature of your small business, this means there could be peak seasons where more goods have to be bought and additional staff hired. Likewise, in slow seasons, fewer products will need to be purchased.

Don’t depend on credit

Having a solid cash flow management system will help you make upfront payments with fewer credit requests. If you plan to purchase goods on credit, you will want to ensure your sales plan indicates you will be able to pay it back.

Hopefully these tips will ensure that you have a better way of managing the cash flow of your small business. Overall, a lot of thought has to be put into creating a functional cash flow management system that will benefit your small business and work for you!

We hope you find these tips helpful!

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