3 Ways to Improve Your Cash Flow #1

3 Ways to Improve Your Cash Flow: Step ONE

When do you think improving your cash flow matters?

 

Can you change it…. 

Overnight? 

Next Quarter? 

Next Year?

  

Whenever you decide it is time to improve the success of your business -- every little decision counts. Think of this invested time, energy and effort as putting intention into your future. Ask yourself: how does this decision affect the next 10 minutes of my life? 10 months? 10 years? It is never miniscule. 

 

  1. Reduce Expenses

  2. Increase Revenue

  3. Reimagine Your Business Offerings (to be Profitable from Day 1) 

 

Over the next few weeks, I’ll expand on each of these concepts as we wrap up 2021. THANK YOU to all of you who are still here. By “here” I mean on my very favorite list of those serious about being aggressively ethical about the “money matters” in your business. It does matter. And I appreciate you! 

 

Strategy ONE

Reduce Expenses. 

Seems pretty simple, right? How easy is it for you to say YES to a new thing to spend money on? Depends on the price… and how much cash you have on hand. Maybe you check your credit card balance or your bank account. Take a peek at your savings maybe. If we are talking a Netflix subscription… it is probably an easy yes. If it is a high-dollar coaching program that promises the moon… I hope you think about it a little longer. To be honest, those high ticket items are not the first thing on the chopping block when I’m doing an Expense Audit. It is all those “little” things that add up I’m more worried about. The things you could be sourcing for more economical options, the things you forgot about and the things that don’t really work (for you at least). No shame… it happens to us all. 

 

So how do I run an Expense Audit in my business? 

Grab some highlighters and PRINT out those bank statements, baby. Credit card statements too. Anywhere/way you spend the cash. 

 

PRU method 

  • P = PROFIT generating expenses  [[[ GREEN highlighter ]]]

  • R = REPLACE cost  [[[ YELLOW highlighter ]]]

  • U = UNNECESSARY evil  [[[ PINK highlighter ]]]

 

Get honest with yourself here. Is buying coffee on the office dime really necessary? Are your advertising dollars panning out?  

 

Next

  • Circle all recurring expenses 

  • Label them as “M” for monthly, “Q” for quarterly or “Y” for yearly 

  • Make a spreadsheet (or grab my template here) for all your recurring expenses. Note how much you need to plan for on a monthly basis for those quarterly and annual expenses. 

 

NOW WHAT? 

Can you cut 10%? Right now? Over the next month? 

Or can you cut just 1% right now?

 

Don’t know what that % means? 

If your monthly TOTAL expenses (highlighted in teal on my spreadsheet) and multiply it by .01 for 1% or 0.10 for 10%. Simple math.

Examples: 

  • If your total monthly expenses are $10,000 – can you cut $100? What would it take to cut  $1,000? 

  • If your total monthly expenses are $30,000 – can you cut $300? What would it take to cut $3,000? 

 

This exercise is first just an awareness – if you haven’t put all these numbers together, or if you have been ignoring all things business for a while but still miraculously staying afloat… it is great to just see it all in one place. That is the power of simplicity. You took pages and pages and pages of reports and statements and got it down to one page (ish?) as a quick snap shot. Go you! 

 

Cutting Expenses

Cutting expenses doesn’t mean you just don’t pay your bills. It doesn’t mean you fire everyone immediately. It means you make informed decisions, find alternatives or hit pause for a bit while you regroup. If something is saving you time or money, don’t cut it out just because I said so if you are actually using it. If you aren’t…. well, then, make a business decision.

How to work together…

Schedule a FREE Discovery Call (click to access my schedule)!

If I help you pay yourself more next year, is it worth it?

Dr. Holly Tucker