How Many Hundred Dollar Bills Are Lying Around Your Office?
There are three ways to have more cash from your business:
- Make more income,
- Pay less in expenses, and
- Manage the conversion to cash better.
One of the simplest and fastest ways to get more cash in your pocket with an operating business is to look for ways to cut your expenses. Many small-business owners depend on the day-to-day operation of their business to pay their personal expenses, as well. So, while we never recommend that you operate your business checking account like a personal account, it does, in effect, create a clear relationship.
The more money you make, the more you can spend on the business, and spend personally. And the more money you need, both for the business and personally, the higher the monthly break-even point is for your company.
If you’re just getting started with your business, seeking to expand, or just want to build up a business nest egg, then you need to watch your business expenses. But you also need to watch your personal expenses if your business is your main source of income. If you’re ready to pay a little more attention to your expenses so you can have the cash reserves you need to do what you want with your business, then you may want to consider a Cash Flow Sunday.
What Is a Cash Flow Sunday?
This is something that my family did when we hit the economic downturn in 2008. Initially, we thought we were going to just concentrate on reducing expenses. But, as we got going, we found there was a lot of opportunity to increase our cash flow in, as well as to decrease the cash flow out.
The first week, we discovered so much opportunity that we called it “finding thousand dollar bills lying around.” Of course, after the initial rush, the easy money was gone, and it became a case of looking for hundred dollar bills.
Here’s how it works:
1 Pick a day that you and your family agree to meet every week. We picked Sunday afternoon because it was a time we were all around, and without a lot of outside activities. That’s where the “Sunday” in Cash Flow Sunday comes from.
2 In no particular order, come up with ten different sources of cash flow in, or reduction of cash flow out, that you can put in place in the next week.
3 Don’t stop until you have listed ten items. The first week or two it may be simple, but over time you’ll find it gets harder to come up with 10 items. Keep going until you have 10.
4 Implement all 10 ideas. If you can’t get them all done, roll the unused ones over to the next week, but you still need to come up with 10 new items to get done that week.
Since our business is so integral to our personal life, we allowed both business and personal income and expense ideas.
What to Review on Cash Flow Sunday
1 Collect on company receivables.
2 Collect on personal or business debts.
3 Sell unwanted items (personal or business).
4 Close a business deal.
5 Open up sales to new markets.
6 Start a business blitz to concentrate on growing your business.
7 Review your credit card statement for automatic deductions you no longer need.
8 Review your auto insurance policy to see if you can find cheaper solutions.
9 Review your current business system to determine if there is a faster, cheaper, and better way to fulfill.
That’s just a sample of a few ideas to jump start your own Cash Flow Sunday. Try it! You’ll be surprised how quickly you can find new cash for your business.