As a small business owner, you can make as many plans as you like and set as many deadlines as possible, but there'll always be times when your cashflow just isn't as free as you want it to be. It's at those times when you can get hit by huge late payment charges and, at worst, have to dive out of a business that could have gone on to be incredible.
But what's the answer if unexpected costs or uncooperative customers can't be predicted? You need a safety net, people there to offer additional defence when all your own efforts are exhausted. Luckily, you have a readymade team for the cashflow battle, and it's made up of your mentor, your accountant and your bank. They can probably offer much more than you expect.
Every member of your team is important and has something unique to offer, but no one will have more knowledge to pass on about your cashflow than your mentor. If you don't have a mentor yet, the King definitely recommends getting one. After all, who'll give you advice when I'm not around?
Find out how to get a business mentor here.
A mentor is a powerful ally because they've probably faced every problem you're scared of before. They'll be able to tell you about the challenges you never even thought of and be on hand to warn you of any cashflow mistakes you could be making day by day.
Your mentor is the front line of your team, helping you dodge the trappings of restricted cashflow with their own experience. Make sure you learn every lesson well because when you become a cash flow master, it'll be your turn to mentor an entrepreneur down the path of secure cashflow.
An accountant is a wise sage. While your mentor will be able to offer their experience and advice, even they will be oblivious to the nuances and particular details of cashflow that accountants are well versed in.
When you have an accountant you can trust, they'll be able to reassure you the decisions you make with your money won't pull the plug on your cashflow reserves. Can you afford to hire that new employee? Is now the right time to stock up on your resources? Your accountant will have the answers.
Your bank is the last line of defence that needs to understand your cashflow before its in trouble. Don't wait until you're desperate to sit talk to them, do it now so they know you're reliable. Tell them your current position, what you're doing to ensure your business' safety.
Once you've done this, the bank will be far more likely to help if you come knocking. Most banks will offer very low cost loans for when your cashflow needs propping up, as long as they know it is a safe bet and the terms have been agreed in advance.
Your bank is your goalkeeper, the one who, if all goes to plan, shouldn't have to do much at all. But it's always worth finding out the costs of a pre-agreed loan and comparing that to the huge late payment fines some companies force on their customers. You'll soon see what the smart last resort is.