By Sylvie Poitras
What is your current cash flow?
Industry Canada states, "The #1 reason Canadian small businesses fail is because of inexperienced management. Business owners don't have the experience or knowledge they need to run their businesses successfully."
Does this mean that you should just give up? Absolutely not! It just means that you need learn how to stay on top of it. What does that really mean?
Well, let’s go back in time for a moment. Years ago, we did most of our purchases using cash. The amount of money in our pocket dictated if we would buy something or not, depending on what else we needed to buy that day. When we had cash in our pockets, we “managed” our cash flow throughout the day.
Now that we use debit cards, we only see the balance when we go online. Plus, since we are getting ‘a’ card out, it makes it easier to grab the credit card instead when we are not sure. It is so much easier to lose track, and as a small business owner, losing track could mean losing your business.
E-learning is expected to grow to $325 billion by 2025, you would think it would be easier to get the training you need. More choices don’t really make things easier.
If you are self-employed (not incorporated), you CAN and SHOULD use the K.I.S.S. principle, Keep It Super Simple. When you do your income tax at the end of the year, you just need totals by categories. There is no need to itemize every single transaction and complicate things.
Having said that, if you don’t want to be part of the statistics of businesses that fail in the first five years, you need to know how your business is doing EVERY month, not just at the end of each quarter or worse, just at the end of the year. This information will allow you to see when to spend and when to hold back.
Take control of your cash flow!