En­trepreneurs can sub­stan­tially im­prove their chances of suc­cess by do­ing the fol­low­ing:

Finweek English Edition - - BUSINESS -

Pre­pare a re­al­is­tic monthly sa l es bud­get for at least 12 months and cal­cu­late, not only the num­ber of monthly sales re­quired to meet the bud­get, but also how much of the ex­pected sales is an­tic­i­pated to ac­tu­ally gen­er­ate cash in the bank each month. It is of vi­tal im­por­tance that sell­ing prices or hourly rates are ap­pro­pri­ately and cor­rectly cal­cu­lated with re­gard to the specif ic f inan­cial needs and re­quire­ments of each busi­ness (the gross profit must be enough to pro­vide for the pay­ment of op­er­at­ing ex­penses). Pre­pare in­voices prop­erly and ac­cu­rately (if ap­pro­pri­ate, re­quest de­posits from clients) and en­sure that in­voices are de­liv­ered as soon as ser­vices have been r en­dered or goods del i vered. It ’s ex­tremely im­por­tant to re­mind clients cour­te­ously on the due date about out­stand­ing amounts that are payable. If sur­plus cash is avail­able once all ex­penses are paid, a por­tion of the sur­plus should be re­tained in a bank or other suit­able in­vest­ment ac­count for use when ex­penses ex­ceed cash in­flows. Fi­nally, the well-known maxim of “turnover is van­ity, profit is san­ity but cash flow is re­al­ity” should be up­per­most in any busi­ness owner’s list of fi­nan­cial pri­or­i­ties.

Thayn Nie­mand is a di­rec­tor of GC Grow.

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