CASHFLOW 💵🙄
HOW DO I CREATE CONSISTENT CASHFLOW?
Want to learn how the Tradies Success Academy can help you optimise your trade or construction business for profit, growth, and time freedom?
Today, we're diving into a topic that can make or break your trade business: "Creating Consistent Cash Flow." I know it's a big one, so let's roll up our sleeves and get into it.
Understanding Cash Flow
First off, what the heck is cash flow? Well, it's the lifeblood of your business, my friends. When you have enough cash in the bank, life's good, and you can keep your trade business running smoothly. But when cash flow dries up, it's like hitting a roadblock that can cause stress and anxiety. Believe me, I've been there myself.
Why Cash Flow Matters
You might have all the tools, assets, and skilled tradespeople in the world, but without cash flow, you're in for a bumpy ride. It's the glue that holds everything together. So, how can you ensure consistent cash flow in your trade business? Let's break it down.
Invoicing Consistency
One key factor is how consistent you are with your invoicing. Are you sending out invoices promptly after each job, or are you waiting until you have the time? Invoicing consistency is the secret sauce to maintaining steady cash flow.
Workload and Invoicing
Now, here's an insight I wish I had known earlier. When you're swamped with work on-site, it feels great, right? But have you considered what's not getting done during those busy periods? For me, it was invoicing. I'd be so focused on completing jobs that I'd forget to send out invoices. And that's where the trouble begins.
Negotiating Payment Terms
Another aspect of cash flow is the type of work you do. If you're into project-based work, negotiate payment terms with your clients. Progress claims and regular payments can be a game-changer. Remember, your staff expect their paychecks weekly, so you need a cash flow plan that aligns with this.
Liabilities Sneaking Up
One sneaky factor that affects cash flow is the buildup of liabilities in the background. Things like GST, taxes, and superannuation tend to accumulate quietly. Suddenly, you're hit with a hefty tax bill, and you're wondering where all your cash went. This happened to me, too.
Collecting What You're Owed
Now, here's a valuable asset you might not be fully leveraging—money owed to you by clients. Make sure you're consistent in collecting payments. It's like paying at the checkout when you shop; you don't walk out and say, "I'll pay you later." But in the construction industry, delayed payments are all too common.
Age Receivables
When you find yourself in a panic about your dwindling bank balance, take a closer look at your age receivables. It's not unusual to discover a substantial amount of money owed, with a significant portion long overdue. Have you made those calls to collect what's rightfully yours?
Protecting Your Cash Flow
The goal here is to protect your cash flow from wild fluctuations. You want to avoid the rollercoaster ride of having too much one moment and too little the next. Implement strategies to ensure that you're consistently bringing in cash and that you're managing your assets and liabilities wisely.
So, my fellow trade business owners, let's get savvy about cash flow. It's a crucial piece of the puzzle that keeps your business humming. And remember, you're an awesome tradesperson, but that doesn't automatically make you a business expert. The Tradies Success Academy is here to help you reduce overwhelm, surround yourself with like-minded folks, and supercharge your growth in both business and life.
Don't let cash flow woes hold you back. Let's master this together and take your trade business to new heights. Reach out to our expert coaches if you need a hand; we're here to support you on your journey to operational time freedom. Keep up the great work, and talk to you soon!
