To grow your empire, you’ll need cash! The more available money, the faster you can expand
your empire. That’s why “Cash flow is King!”
In the beginning, managing cash flow is easy. You know what money is going out what cash is
coming in. You can keep it all in your head. You’re probably doing cash accounting instead of
accrual accounting. Then one day, you wake up, and it is no longer easy to keep it all straight in
Payroll has grown, and the employees need to get paid. In addition, the lease on the building
and equipment needs to get paid. As a result, your expenses have increased, and it has become
even more critical that they get paid on time. Managing your cash flow has become King in your
empire. Here are seven success strategies to help you improve the cash flow in your business.
Seven Rules of Cash Flow
The 1st rule of cash flow is: If the invoices don’t go out, the cash can come in.
Invoice the customer as quickly as possible. If the customer doesn’t get an invoice, they can’t
The 2nd rule of cash flow is: Accept all forms of payment.
Make it super easy for the customer to pay you as quickly as possible. Accept cash, debit, or
credit cards and cheques. Don’t whine to me about the credit card processing fees. Your pricing
strategy and profit modeling should already have that in the cost of goods sold. And don’t ever
ask the customer to pay the processing fee, you cheap prick, make it easy and convenient for
the customer to give you money.
The 3rd rule of cash flow is: Get paid upfront.
Whenever possible, get paid before you deliver the product or service. If you can’t get 100%
upfront, then get a down payment. Ask for some in the middle of the project. The gold is at the
end of the rainbow when you get the final payment. That’s where all the profit dollars are.
The 4th rule of cash flow is: I need terms.
You should get terms on everything you buy for the business. If you don’t get terms – use your
credit card, accrue the bonus travel points. Pay the credit card off on time, and avoid the
ridiculous interest charges. True empire builders will ask for extended terms. They take delivery of the product and pay
sixty or ninety days later. Thus, giving them the chance to sell it before the bill ever becomes
The 5th rule of cash flow is: Take that credit line.
Banks only give you money when you don’t need it. They’ll offer you a credit line when
everything is going well in your business. When they offer it to you, take it. Use it, and pay it off
on time. Increase it when you get the chance. Sooner or later, having access to cash with a low-
interest rate will help you solve a cash flow problem.
The 6th rule is: Don’t buy it, lease it.
Spending available cash to buy a big-ticket item can seriously pinch cash flow. Buying a truck, a
trailer, a large printer, and paying cash may get you a little bit of a better deal because you are
helping that vendor with their cash flow. However, you no longer have that money flowing in
your business. Yes, you increase your monthly overheads when you finance large ticket items,
but you leave more cash in the company.
The 7th rule is: Don’t provide terms.
Are you a bank that lends money interest-free? Well, that is what you are doing if you extend
terms to your clients. You are helping them with their cash flow issues at your expense. There
is no rule that you have to provide terms. There is no rule saying the client will pay on time.
Providing terms to your clients makes managing cash flow even harder.
Golden Rule of Cashflow: Only the owner signs checks.
Let someone else besides you sign the checks if you want to see the money in your bank
account disappear one day. Unfortunately, it has happened to more business owners than I
care to mention. Any employee can deposit money into the corporate bank account, and only
the owner should be able to authorize the money coming out. The bookkeeper or accounts
payable person or accountant can write the checks. But, again, only the owner can sign the
A growing business can never have too much available cash. It is always a good idea to keep a
rainy-day fund as well. Shit always happens, and the solution is usually to spend more money.
Keep some in reserve.
Wondering where all your money is? You look at your accounting statements that show a big
profit and a low-balance bank statement. The answer is tied up in cash flow. Typically, as the
business grows, so does the amount of cash floating the flow. That’s why cash flow is King!