{"id":2718,"date":"2020-09-04T10:13:47","date_gmt":"2020-09-04T02:13:47","guid":{"rendered":"https:\/\/www.estimatingsolutions.com.au\/?p=2400"},"modified":"2020-09-04T10:13:47","modified_gmt":"2020-09-04T02:13:47","slug":"cashflows-crucialforgrowth","status":"publish","type":"post","link":"https:\/\/betadelivery.website\/esgrevamp\/blog\/cashflows-crucialforgrowth\/","title":{"rendered":"Why are cash flows crucial for small business growth? By: Julie Payne"},"content":{"rendered":"

Now that the importance of budgets was discussed (if you missed it, here is our link Why are budgets crucial for small business growth<\/a> to catch up) , let’s understand how cash flows can be useful through the expansion and the growth of a business.<\/p>\n

Cashflows<\/p>\n

It\u2019s all well and good after completing your budget and deciding how you are going to expand – but now the big question comes in, how will you pay<\/strong> for it?<\/p>\n

Yes, my budget shows a profit<\/strong>, but this may not convert<\/strong> to actual cash for another 2-3 months.\u00a0 How do you pay your normal trading costs<\/strong> and now the additional expansion<\/strong> costs<\/strong>?\u00a0 How much working capital<\/strong> do I need to enable my business to grow? A cash flow model<\/strong> will help you plan for those unexpected costs<\/strong>, changes in trading terms<\/strong> and paying your normal trading expenses<\/strong>. You will always have customers that will pay on time but there are also a large majority of them that will take just that bit longer – which for a large business<\/strong> would not cause too much concern but for your small business<\/strong> this could be a disaster. So how do we take control of this and make the cash work for us<\/strong>?<\/p>\n

Key factors to start with:<\/p>\n