� Important Cash Flow Rules
� Dokeep Cash Flowbudgets up to date � Docompare forecast against actual figures and monitor these results regularly � Do keep controlling costs while pursuing sales � Do check and monitor stock levels regularly � Do cost out the expense of securing new customers and / or members. That is, marketing costs.
� Dofocus on receiving payment for sales including memberships � Doavoid unnecessary or excessive expenditure � Doarrange further financing, before you will need it!
� Don’ tassume payments will be received on time
� Don’ ttie up excessive cash in working capital or unproductive areas
� Don’ t overtrade by accepting orders you cannot finance
� Managing Cash Flow
Remind the participants to:
1. Populate, monitor and revise the Cash Flow template ahead of each session and report results to the mentor and participants at each session.
2. Identify possible short-term fluctuations and account for them as they may not show up in the weekly or monthly budgets.
3. Develop warning processes to identify where delays or unexpected changes could cause the social start up to run out of cash.
4. Be prepared to trade off profitability and / or other enterprise objectives when your Cash Flow position is, or may become, critical.
5. Minimise the amount of cash owed to the social start up by restricting credit periods or factoring debts; invoice promptly and follow up payments vigorously.
6. Generate income from short-term sales by offering incentives to bring forward purchases and discounts for cash payment.
7. Be prepared to turn down orders if you cannot finance them; negotiate deposits or stage payments for large orders and long-term contracts.
8. Cut unnecessary costs and shop around for competitive prices; negotiate generous payment periods and short delivery lead-times.
9. Use a stock control system to minimise cash tied up in stock.
10. Assess the Cash Flow position before committing to any new expenditure or increases in overheads; consider using leasing to finance assets.