| Your cash flow is the lifeblood of your
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| | Of course you don't want to be penalized
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| business. You can be billing thousands of
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| | for late payments, but push it as far as
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| dollars each month but if it takes your
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| | you legitimately can.
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| clients 30-90 days to pay, your cash flow
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| | When you know what your past, present,
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| can be non-existent - particularly if you
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| | and future cash balance is, you can
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| have expenses to pay while you're waiting
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| | create an accurate business plan. Let's
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| for clients to pay you.
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| | take a look at two aspects of a business
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| Your cash flow, and your cash flow
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| | plan and how your knowing cash flow will
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| analysis, is your number one tool to
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| | help you:
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| keeping your business solvent and
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| | Marketing Plan. Marketing generally costs
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| thriving. Fortunately, the basic elements
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| | money. When you know exactly how much
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| of your cash flow are really
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| | money you have now and can accurately
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| straightforward. The equation is:
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| | predict how much you'll have six months
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| Starting cash
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| | from now, you can with relative certainty
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| Cash in
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| | create a marketing schedule that meets
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| Cash out
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| | your needs. For example, let's say you
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| Ending cash.
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| | want to produce a brochure this month,
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| Pretty easy, right. It's like balancing
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| | have a direct mail campaign the following
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| your checkbook. If you keep a spending
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| | month and then release a new product and
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| plan or budget, these numbers are tracked
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| | a corresponding promotional campaign.
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| for you on a weekly or monthly basis.
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| | Knowing your cash flow can help you get a
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| Good cash flow management enables you to
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| | head start on planning these campaigns
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| predict the state of your future
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| | because you will know what you have to
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| finances, and daily management makes it
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| | spend.
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| easy. It makes creating a business plan,
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| | Operational costs. Many of the costs of
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| and modifying your plan, possible. It
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| | doing business are fixed costs. However,
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| enables you to answer the question "What
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| | choosing to outsource a project or
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| will your cash balance be six months from
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| | several tasks means you need to be able
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| now?"
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| | to pay a contract employee, and paying
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| Here are just a few tips to help you stay
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| | employees means you need to have a solid
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| on top of your cash flow:
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| | grasp of your cash flow. If you don't it
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| 1 Deposit all checks/payments you receive
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| | could mean being unable to pay someone
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| immediately.
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| | for a job they've been hired to do.
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| 2 Invoice frequently and change your
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| | As you can see, knowing your cash flow
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| payment terms to 15 or 30 days.
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| | has a significant impact not only on your
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| 3 Collect receivables within 60 days.
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| | ability to do business, but also on your
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| 4 Experts also advise using prenumbered
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| | ability to plan your business. And as any
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| cash receipts and checks for easier
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| | business person knows, you don't just
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| management.
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| | wing it in business, you need a plan.
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| 5 Lastly, pay your own accounts slowly.
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