The Importance Of Cash Flow
Cash flow is so important so make sure there is always something in the bank to cover the costs of certain things which keep your business operating.
Starting off in business is tough, very tough, and if you want to succeed then not only do you need the right tools and equipment, but you will need a constant cushion of cash, also known as cash flow, not to spend it on more tools and equipment that you don't necessarily need at that point, and most definitely not to spend it on an expensive lunch every day because you have the money in your bank account, but to have it laying there to buy materials or parts to take on more work, to allow you not to knock a job back because you can't afford to buy the parts before you get paid.
Accounts
Yes you can get accounts setup which will help but starting out in business means that you might not get the credit because you are a new company, or because the supplier doesn't know who you are, or maybe because you didn't pass a credit check.
Even if you do have the accounts setup then think about the times where you have to wait until you get paid, it could be a month or two, and sometimes longer.
You need the cash flow to dip into every now and then, so don't abuse it, use it wisely.
Mix ups happen in business and sometimes businesses or people don't have the money to pay you right away, and that can have an effect on your business and the plans that you have in place to pay your suppliers.
My advice is to always build a good cash flow up so that it will help ease the financial strain that startups will inevitably face from time to time.
Whatever the reason, we all need some kind of cash cushion, some form of piece of mind to keep the business operating without it stalling.
Responsible
Don't go mad if you have some money built up, buy the things that you need to get the business up and running, there will be things that you don't really need at the start, but over time you will need them and once you have jobs that demand for certain things, be it tools or equipment, then spend some of it, but always keep in mind that you need something in the account for things that you can't predict.
As the saying goes 'Rome wasn't built in a day', so take it easy and slowly work the business up, and when you have that extra cash, then you can go out and buy whatever it is you are needing, without having the stress and worry in the back of your mind about bringing your business to a halt because you can't afford the materials to do the current job.
Business is a tough gig so don't make it even tougher for yourself with adding money issues to all the other worries that you have, because you are in business for the long haul and you will eventually get what you need over time.
Yeah the foolish thing People do is use their profit for fun ! ... Save it and reinvest !
Yeah I know someone who earns good money but is always struggling to pay their suppliers etc because he can't help himself with spending money on stuff he doesn't need.