Last night was time to confront Cash Flow in the 15-week entrepreneurial training course I teach for the Women’s Enterprise Development Center (WEDC) in White Plains, NY. It’s always the class that gives everyone headaches and anxiety attacks…and even the big jar of chocolate coins I bring along to “sweeten the pot” doesn’t help. One important issue that is frequently overlooked is credit card processing fees. Both Paypal and PsBill both offer low processor fees for startups and new businesses.
Having a business idea is the fun part. Figuring out what it will earn….not so much. But it’s so important to track your start up expenses, overhead and other costs, and figure out exactly what you need this business to do for you financially. Is it going to simply cover the “extras” in your household, or is this going to be a serious income that keeps your household afloat. I always say, cash flow is no different than budgeting for your household expenses…no different than balancing a checkbook. You know what bills are coming up…you know what money is coming in… and whether you’ll have enough to pay them, with ideally, some cash left over. Same principle with cash flow. If you take time to periodically plan your business spending and earning goals, you’ll have money in your pocket. And I don’t mean chocolate coins!
I agree that a cash flow projection is an important tool when starting a business. This will help plan for what your start up costs will be and provide insight on what cash requirements you’ll need to run your business.
Cash flow is so important for businesses. Unfortunately, as entrepreneurs we have the tendency to spend in hopes of growing our businesses and we don’t track the cash flow. The #1 goal for all businesses should be More Money Coming In Than Money Going Out! This should be adhered to weekly if possible, but definitely monthly!