The lifeblood of any business enterprise is cash flow. You need it to buy inventory, pay for services, promote and market your business, repair and replace tools and equipment, and pay yourself so that you can continue to work. Therefore, all home business owners must become wise money managers to ensure that the cash keeps flowing and the bills get paid. There are two aspects to wise money management.
- The money you receive from clients in exchange for your goods and services you provide (income)
- The money you spend on inventory, supplies, wages and other items required to keep your business operating. (expenses)
Oh - I can hear you now, "I've got this one covered!! I mange my money very wisely, since I have so little of it." And perhaps you do, but perhaps you could do better.
Managing your money wisely begins long before you have any money, when you plan to have money. How structured is your budget? Does your fiscal planning show where your priorities are? Or have you thrown up your hands and said "There's no money for anything, so we just spend it until it's gone."
Entrepreneurial thinking business owners and government officials will take a quick look at your programs, your outreach and your customer service to see how you are doing, but they will want to follow the money to see if you are successful. Think Jerry McGuire - "Show me the Money!"
If your plan says that you will have added 5% to the Teen collection by the end of the year - does your budget show that commitment? Have you estimated what 5% growth in the size of that collection will be and what it will cost? This is where our planning usually breaks down. Taking the steps to make sure we implement our plan is work, it can be tiresome and tedious and taxing. (Don't you like my alteration?) It is also necessary.
So if you want to prove that you have made a commitment to your plan, if you want to be Entrepreneurial in your thinking - take the next step in your plan and mange your money, rather than letting it mange you.
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