Cash flow is more than just a number on your balance sheet. It's the center of your business. Profits look good on paper but if you don't have any cash coming in your business could stop. You need to keep track of how much money is coming in and going out of your business whether it's a small coffee shop in Alamo Heights or a tech startup in the middle of the city.
What does this mean? Problems with cash flow can happen out of the blue just like a thunderstorm in Texas. You have to guess what will happen. Write down how much you think you'll make and spend each month. Keep an eye out for any shortfalls that might happen soon when your costs might be higher than your income. Having money saved up is like having an umbrella when it rains. It keeps you safe from costs that come up out of the blue. Put enough money in a business savings account to cover at least three to six months of expenses.
I know what some of you are thinking right now. Making a budget is about as exciting as standing in line at the DMV. But believe me the best thing you can do to help you grow is to make a budget.
As a first step keep track of how much money you make and spend. You can use programs like QuickBooks or Xero to help you figure out those numbers. Regularly compare the numbers you planned to spend with the actual numbers. This isn't something that happens once it happens all the time. Find differences early so you can change things.
Put it into groups that make sense for your business. Think about things like rent utilities salaries marketing and stock. Leave room for "the unexpected." Let's face it life throws us curveballs. The good news is that if you plan for these bumps in the road they won't be as scary and will be easier to deal with when they happen.
It's hard to be in debt. It can be your best friend or your worst enemy. In a city where things are always changing it's easy to take on too much too soon. Be aware of what you can and can't do. You should use debt to help your business grow not to keep it from growing.
Pay close attention to how you use debt. Are you borrowing more money to pay off your old loans? You might want to rethink your plan if that's the case. Always try to use debt to pay for growth opportunities that will pay you back more than the cost of the debt. The most important thing is that these investments whether they are in new equipment or expanding your current location make you more money.
The interest rates are also important. They can be very different from one another and even a small change in percentage can cost or save you thousands of dollars. Keep an eye on the Federal Reserve's interest rates and how they change things. You can find out about these changes on websites like Federal Reserve's interest rates.
In this day and age of information there is no reason to fly blind. It's not just techies in Silicon Valley who can use data all business owners in Alamo City can too.
Analytics can help you figure out what the market is doing how customers act and how sales change over time. You can use software like Google Analytics Tableau or even Excel to help you make sense of your data. Instead of just going with your gut you can use these insights to make smart business decisions.
For example you own a restaurant in the Pearl District. The numbers show that your lunch service brings in the most customers and money. After that you could choose to put more effort into advertising lunch specials or even change the way you staff your restaurant to better handle the rush.
You need to think about the long term if you want to keep growing. You shouldn't just think about the next three months you should also think about where you want to be in a year or five years. What do you want your business to do? Is it growth? Diversification? Anything else?
It's very important to plan ahead. Who will take over if you decide to step back? You should be clear about what you want the business to do and write it down. You need to have a clear business plan if you want to get money from investors or lenders.
Look over your goals again every three months for a few minutes. Look into the business climate in San Antonio and see if it works with your plans. Visit the San Antonio Chamber of Commerce to learn more about businesses in your area. Make changes to your goals as needed but don't forget about the big picture.
Business owners in San Antonio have a lot of chances to succeed. Finding a balance between passion and practicality is the key. Make sure your finances are stable by making smart budgets using data wisely keeping your debt under control and not forgetting about succession planning. Keep in mind that business is always changing. Plan for change accept it and lead your business toward long term growth. It's a tough journey but if you remember to take care of your money you'll make it through. Remember that a business that is doing well isn't just making money right now it's also making money in the future. Are you ready to do well in the Alamo City? Let's make that happen!
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