Like many people, when I started my business I read books, visited entrepreneur websites, spoke to advisors, went to workshops and of course, shared, liked, posted many, many entrepreneur quotes. A lot of information stuck with me but cash flow has stuck with me forever. It stuck with me but it had no meaning until 3 years later.
Here’s Google’s definition, “the total amount of money being transferred into and out of a business, especially as affecting liquidity. It meant nothing to me. This definition is the one that resonates; Cash flow analysis is the study of a business’ cash inflows and outflows per cycle, with the goal of ensuring adequate cash flow for business operations.
Another
reason I didn’t get it, and this is the truth, I’m a reformed spender. As a reformed spender, when money came in, money went out. It wasn’t until I missed mortgage payments and bills were piling up that I started to realize that my spending strategy would not work if I needed money past the moment I received it. I learned to save but still cash flow was just a term that made me download a spreadsheet from SCORE, fill it out and I even set a task in Asana to check it monthly but it had no real meaning, yet, for my business.
It took me 3 years because it took that me long to create a steady flow and mix of retainer and project-based contracts. This gave me cash to analyze. And more importantly, when I moved to Philadelphia I needed customers quick and wanted to know how much I had to dedicate to growing my business. It was then, my spreadsheet made sense.
My new BFF is my cash flow report. Like a best friend it tells me, with complete honesty, at any moment in time, how much I have to invest, forecasting revenue I will need in the next month, few months a year. More importantly, it has helped me determine how much I have invest in the marketing of my business past networking and social media.
Growing a business is always a time for learning, changing and moving on and I’m so glad that I have moved on to be a cash flow queen!
Maisha's Lemonade Stand 
Maisha, you’re not alone. When I started Grow Beyond I thought I’d be helping solopreneurs with marketing & communications strategy, but I quickly realized they needed much more fundamental support in understanding the financials of their business so they could then make informed decisions about their marketing and communications. So, I changed my service offering to start with addressing this critical need and that really changed my business.
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Great minds. We started off with the same thoughts and then did the same thing. I added a couple CFOs as partners so we could match marketing to realistic forecasts. My marketing plans service includes a financial review.
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Well I sincerely enjoyed reading it. This article procured by you is very effective for correct planning.
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I think that cashflow analysis is very important for business. This article is very informative and helpful for me to understand it well. I also believe that growing a business is always a time for learning. This article is very informative and helpful. Thanks for sharing this.
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This is a good read! I agree that we have to be familiar with everything that is involve in our business so that we can do everything to grow our businesses. Growing the business is always a time to learn new things. Thanks for this!
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You’re welcome! I use Fundbox so I love the concept of your site.
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Yes, I agree with what you said. I also think that growing a business is always a time for learning, changing and moving on. I think that we should open ourselves to explore and discover new things in order to succeed in business and in life. Thanks for sharing this article. This is a very helpful post.
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Yes, I agree. Growing a business is always a time for learning, changing and moving on. I also think that we really have to have an open mind and to explore new things when we are going to run or manage a business. Thanks for sharing this article.
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You’re welcome and yes, an open mind is important.
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