How to Minimize Cash Flow Problems

Consistent growth is the best way to smooth out bumps in cash flow. When opportunities for growth present themselves, plan carefully. Make a conscious decision about how much you have to spend to meet the opportunity and how long it will be before you will be able to pay it back.



Every investment, whether in inventory, people or equipment, should have a clear return. Make sure each earns a profit, but also look at how long it will take to collect them. Likewise, if you look at each customer as an investment with a scheduled return, you'll not only improve cash flow, but profitability, too.

Allocate costs to each customer by isolating and assigning each cost in the business to a job. Don't use one job to fund another; make sure each stands on its own merits. When each job is profitable, and profits are collected on time, cash flow problems will begin to diminish.

Networking for new customers and business opportunities also requires some investment. You can find creative ways to minimize the costs associated with doing so if you have the right credit tools. For example, a good way to reduce travel budgets when cultivating new business is by earning and using Credit Card rewards that you can apply instead of cash.