As an entrepreneur it is imperative to look at possible ways to grow your business and the best way to do so is to have a good cash flow. The underlying article discusses how to increase your Entrepreneurial Dollar kn detail.
As an entrepreneur you should have very important skills in order to have a successful business, and one of those very important entrepreneurial skills include your ability as an entrepreneur to have a very good financial sense. I know it is one of the most difficult skills to posses; however, it is very important as your financial sense goes a very long way in determining the level of success that you can achieve as well as the degree of expansion of every entrepreneurial Dollar that is available to you.
What is the meaning of financial sense?
Financial sense simply means the ability to analyze activities or better say business transactions in a financial manner. As an entrepreneur your knowledge of the financial aspect of business is very keen in determining the long term success of your business. In this article we are going to look at some tips on how to use your financial sense to expand your entrepreneurial Dollar.
Have a realistic business plan
Whenever you decide to embark on any business activity it is very imperative to have a business plan as the catalyst of your business. You just don’t need a business plan, but you need a business plan which is very realistic in its projections. Business plan is forecasted financial statement of your business, and contains projections such as revenues, gross profits, operational expenses, accounts receivable and accounts payable.
In order to start or expand your business you would need your business plan to do much of the talking for you, hence if certain figures in it seem unreasonable and unrealistic your chances of securing equity finance for your start up or expansion purpose only gets slimmer.
Consider debt finance
It is a common practice in business that businesses do use leverages to enhance their cash flow in order to have smooth running operations in their business. A good cash flow is imperative for the smooth running of your business and can easily spur the growth of your business. Debt finance or leverages do not come cheap so as a business owner or entrepreneur you need to assess several debt finances that are available to you and choose the right one that meets your needs at the right moment.
You should know that debt finances come with interest on the principal, and interest are usually calculated based on the amount of time that you are in possession of the money, hence you would have to consider repayment of the principal and the interest as well within the shortest possible time.
Consider alternative product pricing options (price reduction)
What drives a business is the availability of cash, so why do you lock up a lot of money in stock when you could possibly sell at a lower price in order to release a lot of cash in order to enhance your businesses operation. Sometimes it is better to reduce you selling prices, whiles making not so much profits than to have stock in your warehouse and borrow monies which you would end up paying interest on to finance your operation. You should also consider the cost of warehousing, as the longer the stock stays in your warehouse the more your warehousing cost goes up.
Having or improving Effective communication skills is important for any employee. It leads to professional development.
Starting a small business is without a doubt a big challenge for everyone. But it can easily be done by someone who has good work ethics, responsibilities, a good plan and a lot of resources.
It is very important to have healthy cash flow system in your business, as cash is the life line of any business, hence the need to improve your businesses cash flow..