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Welcome to the 17 Sins of Cashflow Management

By Greg Carroll 


Whether you have been in business for 5 minutes or 5 years, cash flow, or lack of it remains one of the biggest challenges for business. Even businesses that have plenty of customers and demonstrate good profits can still run into cash flow difficulties. However, many situations where a cash flow short fall occurs can be prevented, or managed.  


The reason for writing this course was to provide small business owners with a guide to help better plan and manage their businesses cash flow. The ideas, thoughts and thinking contained in this book have come from a range of different areas including - my own learning and experiences from studying and working in the finance sector; working in a number of small businesses; and the strategies, observations and experiences that hundreds of small businesses owners have shared with me over the years. 


This course is not complete guarantee that your business won't run into cash flow difficulties. There are a whole host of factors, many of them external to your business that can impact on your cash flow. But I do believe if you take the thoughts and ideas from this book and apply them to your own business, your cash flow will be in a better position than if you had done nothing at all.


Importantly the rules that apply to business cash flow are essentially the same rules that apply to managing your personal cash flow. Therefore even if you are not in business there are many things that you can apply to your situation. 


Finally I would like to say that many of the mistakes and observations covered in this course are ones that I have personally made, or at the very least have occurred in business where I have worked. So I'm certainly not here to judge anyone, but I would like to see other people avoid the mistakes I have made.


I hope you find the course helpful and wish you every success. 


Well let's get down to it.


Sin Number 1- Not doing your research first.


This one probably seems a little obvious, but it is a step that many businesses either overlook or skim through rather than giving it the attention it deserves. Many business owners become so excited by the idea of creating a business, or developing a product that they fail to do even the most basic of research to gauge the viability of their idea. I have seen new businesses lease premises, spend huge amounts on fit outs, equipment and staff, yet not bother to determine whether there was actually a market for their business.


Now I don't want to kill the entrepreneurial spirit, I love seeing people getting out there and having a go. But even the best entrepreneur knows that if no one buys your product or service you don't have a business. So before you start why not do a bit of research first?


A good place to start is by asking yourself some key questions:


·         Who are your customers? In detail - where they live, what they earn, what they think, what motivates them, what are their fears etc

·         How big is your market and what share do you expect or need to obtain?

·         Who are your competitors?

·         How you will reach and market to your customers? What's it going to cost?

·         Why would people buy from you rather than your competitors? And I've got a clue for you if you think it's service or price then you need to do a lot more research

·         Why should they believe it? What proof do you have to back up what you say?

·         How you will price your products and services?

·         How many of your products and service you need to sell to make a profit?

·         How much it will cost you to keep your doors open each month?

·         What sort of people and systems will you need in place to back up what you say you can deliver?



The list above only skims over the surface of the types of questions you should ask. In fact they will probably lead you to ask more questions.


The great thing about the internet is that it opens you up to an enormous amount of information. So if there is something you are trying to find out about your industry, your market, whatever it may be, there's a good chance the answers are only a few clicks away.


So once you've asked yourself these questions and think you've found some answers, your next step is to push it a little further. You need to go test the waters to see how people respond to your idea. Now you could start with your friends, but most of them may not be prepared to be brutally honest with you or alternatively they may be negative based on their own fears. Also they may not fit your target audience. What you are looking for is good honest feedback from the people that you want as customers.

You could spend a lot of money with a market research company to do this but if you get creative there are a range of low cost ideas you can use. Again the internet opens up lots of possibilities.


You can also discuss your ideas with highly respected and experienced people in your industry. I know this might seem odd approaching the opposition but you may be surprised at how willing people are to provide advice. I have generally found that those who are successful are often keen to give back to their industry or community and are often more than willing to provide guidance to someone just starting out.    


The key thing you are trying to do in this process is to put the assumptions about your business under some scrutiny. The likelihood is that you will have some of your thoughts and ideas shot down or at best cut back a little. But that's OK that's what you want from this exercise. It's better to find these things out at this point rather than when you've already spent the money.


This process alone won't see you avoiding mistakes altogether, you are going to make mistakes in business. But hopefully it might help remove some of the potentially big ones that could really affect your chances of success.


This approach doesn't just apply to new businesses it applies to existing ones as well. Before you rush off and spend thousands of dollars on a new an ad campaign or a new product range, why not do a little bit of testing first? Your existing customers are a ready made testing ground. You can get their feedback any number of ways - surveys, invitations to special events, focus groups just to name a few. The good thing about people is that if you ask for an opinion they will generally give you one.


But one important point, to get valuable feedback you need to ask the right questions. If you only ask surface level questions then you will only obtain surface level information, which probably won't provide much guidance. Or worse steer you in the wrong direction because of the questions you didn't ask.


Some people take a little while to open up, or don't know how to communicate what they think in the first instance so always be prepared to dig a little deeper for the answers. 



Are you on top of your cash flow?

Are you currently in business or planning to start a business in the near future?  Do you have cash flow concerns or want to find ways to improve your cashflow? Are there things you should or could be doing to improve your cash flow now?


To find out simply complete our Cashflow Review Form or complete the form below for an initial interview.

This course is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this course. All information is subject to change without notice. We and each party providing material displayed in this course disclaim liability to all persons or organizations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material.