Article_Cashflow is King for SME and Contractors

Running a small business requires careful planning and review of finances. Whilst a business owner’s overall annual income may be strong, the flow of money is not guaranteed to be regular and many owners have to wait weeks or months between pay cheques.

It is critical to avoid running out of money and being forced into overdraft or to use credit cards with huge interest rates. Here are some suggestions to help with positive cashflow.

Set up a business Expenditure Planner
An expenditure planner will give you snapshot of your business’ expenses and income and allows you to strategically plan your future spending in advance. Although you cannot predict unexpected bills and circumstances, an expenditure planner will give you some guidelines to follow. Search the internet for an example of one that you could modify to suit your circumstances or put one together yourself in excel.

Consider yourself a wage earner
Pay yourself a weekly wage instead of treating all the income you earn from your business as your personal spending account. By doing so, you will automatically set yourself a monthly target of what the minimum is you need to get in the door through sales.

Separate your business and personal bank accounts
This way, you will know what your personal cash flow AND your business cash flow looks like at a glance.

Personal budget
Set a personal budget to help you live within your wage, so that you are not tempted to dip into business funds. Read our 60-40 Budget article as guide to good personal budgeting.

Plan ahead for holidays
Unlike employed workers, your holiday budget requires to you set aside funds for holiday expenditure plus cash flow to carry the business through the holiday period. Saving a little extra on a regular basis will help you manage through any quiet business periods, as well as funding a well-deserved break.

Time is money
Focus on your core skill and this will also add to cash flow control. Your time is best used generating income for your business, not being distracted by the peripheries of running of business. Consider outsourcing some of the time consuming tasks or engage professional help in specialist areas to help you focus on managing your core business and maintain positive cash flow.

Attend a complimentary meeting with one of our advisers who work with effective budgeting and cashflow management tools that help you develop strategies to manage your money and start building real wealth. Contact us today on (07) 3223 6000 or email

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