Why Cashflow Doesn’t Have To Be Your Number 1 Source Of Stress

As a new, or would be, business owner, one of the most frightening things can be the prospect of cashflow, and how it can stand to affect your ability to operate. Cashflow issues usually arise either when you are waiting for payments from customers but need to pay out on overheads or for materials and labour for the next job, or when you need to pay for supplies to do a job before you get to invoice for the work.

Why Cashflow Doesn't Have To Be Your Number 1 Source Of Stress

Why Cashflow Problems Are So Stressful

Cashflow has kept many a business owner awake at night, and some have gone without paying themselves or even turned down work as a result of being in a bad cashflow situation. People have been known to take out loans or use credit cards to pay for things they need to keep the business afloat even though they actually have a lot of money in the pipeline that they just can’t access yet. This can make running a business very stressful, even when on paper you are doing well and have plenty of money coming in.

How to Avoid Cashflow Related Stress

There are several things you can do to avoid the stress of negative cashflow. The first is to try and build up a good buffer of money that can cover the things you need to deliver to clients (as well as keep yourself living comfortably) during periods when you are waiting for payments. Obviously, this can be easier said than done and can take some time to achieve, however.

Another thing to do is look into getting a good invoice financing arrangement. Invoice finance is provided by financial services companies like Touch Financial to businesses as a way of covering their cashflow. Effectively, they allow you to access the money you have on currently unpaid invoices and repay it when the invoice is paid, removing the issue of waiting for payment. This is, of course, subject to status, but can be a service that can not only remove stress but also allow you to take on more work, knowing that you will not be in a bad situation if you have to wait for payments from your customers.

When you are starting out, planning how to deal with cashflow can be one of the most important parts of your strategy, especially if your business requires you to use a lot of labour or materials to deliver a new piece of work.

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