Ep 42: Cashflow Confessions - The Biggest Killer in any Business - Coaching Conversations


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People Profits & Purpose Podcast with Nick Psaila


Today in Coaching Conversations, Chris and Business Growth Expert, Tony discuss the challenges of cash flow in business. What is it? Why is it important to keep that cash flow coming? How do you track the money flowing in and out of your business? Many astute owners still fail to grasp the concept of cash flow management but today Tony gives us usable insights at a deeper level. He’ll give us accessible tools to bring new ways to plot and manage cash flow - so we’ll know what’s coming – and going! It’s time to stop playing catch up and realise that there ARE ways to get on the front foot … in this valuable episode of Coaching Conversations! Time Code/Show Notes 0.22   Welcome to the show and intro. 1.50   It’s a basic fundamental. Making money is critical, that‘s why you are in business. Tony says cash flow is like “breathing” and how this effective metaphor illustrates how short breaths in (money coming in) and a long breath out (more money being spent) represents your business – under stress and in danger of crashing. 4.36   It is crucial that you are “bringing in more money than is going out”. Use this analogy to think about your current cash flow position. 5.40   The million-dollar question is “what causes cash flow problems”?        While every business is different, Tony assures us there are standard insights. Look at your sales ratio? Are sales failing to stack up compared to expenditure? Are your expenses too top-heavy? Staff – resources? Even when it’s quiet staff have to be paid each week. 7.15   Are you crippled by not being able to make regular payments?                  Super… insurances… vehicle regos et al. Do you find yourself managing the day to day but when those large payments come along, does it drain the coffers? Do not fall into the trap of going on ATO Payment Plans or deferring super payments. Sleepless nights worrying about debt is not cool for anyone. 9.30  Tony reveals that cash flow is the third biggest killer of business.            When you’re in a lot of debt, the only option is to bail out.                                Managing YOUR cash flow is that IMPORTANT. 10.22   There a three great tools to help you drive through this cash-flow hump. From a financial stance, become more aware of what is going in with your business. It’s not your accountant or bookkeeper’s gig – the responsibility sits with you. Your BANK STATEMENT is your most important tool. 13.30  A fantastic tip is to budget and plan using a free ATO                              spreadsheet so you can plot and track how you are travelling. Tony has great things to say about this amazing tool. Map out your year now while it’s still early!              15.45  Structure payments so you’re not hit with large sums that haemorrhage the business. You must put that “rainy day money”                    aside to cover situations. Reserve monies for your BAS, your                       Super, your insurances… 19.40  If numbers scare you, Tony highly recommends speaking with your accountant. Know what you need to do and how you need to do it. Their advice can really help you turn it around.    22.31  If you’re struggling with cash flow, shoot us a question at ask@upcoach.com.au EPISODE SUMMARY        First and foremost, the take-away from today’s conversation is awareness. Knowing why cash flow has such an impact on your business. Knowing what your “outgoings” are and using the tools that are available to you.   Examine that Bank Statement – and often! Download the schedule from the ATO – it’s free and it’s fantastic. You have the tools to understand, manage and control what happens with your cash flow. And don’t forget to schedule payments so you don’t impact the cash flow of the business when you need to out-lay big sums of money. If you’re not making the margins, please, don’t plod on. Remember, it’s not what you earn, it’s what you spend that gets you into tricky situations! But there are tools to help you turn it all around. Sleepless nights over debt and expenditure should be the extreme exception - not the rule ?