The single most important factor within your trade business, right now, is your cash flow...
Cash flow = Business health
If you have lumpy and inconsistent cash flow...
The health of your business may be at serious risk!
Because just as many trade businesses go under from over-trading as they do under-trading.
This means that you need to increase the amount of money coming in, and decrease the amount of money going out in your business.
Here are some quick tips...
To increase the money coming in, you can:
- Invoice as promptly as you possibly can
- Shorten your payment terms right down
- Make sure you’re always pricing profitably
- Stay on top of your accounts receivables
- Always have a written signature on works
- Market and sell your business like crazy
- Schedule your jobs & resources carefully
- Follow up, follow up, follow up!
To decrease the amount of money going out, you can:
- Cut all unnecessary overhead expenses
- Back cost all your jobs and track your GP
- Negotiate payment terms with suppliers
- Budget and know your breakeven point
- Measure your labour productivity
- Reduce and minimise your debt
- Track every single one of your costs
- Streamline your operational systems
Cash flow is the oxygen that keeps your business alive and healthy, without a sufficient amount, you risk losing everything, so make it a priority!
If you're an electrician, plumber, painter, carpenter, or any other tradie business owner who is looking for assistance with your tax, accounting, and bookkeeping - click here to learn more!