The Five Key Mindsets of Good Cash Managers
A business owner’s mindset about cash management is the difference between having enough cash and struggling to meet expenses every day.
When I meet a business owner who struggles with cash flow, I ask, “Tell me about your business?” They can say whatever first comes to mind, and they usually tell me the good things, starting with whatever their business is known for and what’s going well.
- “Our unique products are awesome! We can’t make enough!”
- “We carry the best selection in the area and have service to back up the sales.”
- “We have a contract with the power company that others would kill for.”
- “Our systems can handle a lot more volume. We’ve figured this out to the last detail.”
People talk forever about the wonderful parts of their businesses. Those areas that the business was built around- marketing, products, software, services… anything that helped them grow sales.
The One Thing that...
Only Manage Your Cash if You Want Your Business to Survive
I love seeing the wide variety of businesses around the world. It’s one of the reasons that I enjoy working with small to medium sized businesses – there is so much variety and so many ways that people have figured out how to make money. I get jealous that I don’t get to work in many of the businesses that I learn about. They are so innovative, and it seems like it would be so fun to be part of the team!
These companies generally have:
- Innovative products and services
- Great demand generation marketing
- A good sales team to grow revenue
- Operational excellence that is generally close to the skill of the founder
After that the business usually has weak spots. They generally lack systems and operations throughout the company that will allow them to scale. Especially when it comes to accounting, finance, and cash management.
Between my experience and the conversations that I’ve had with accountants and business consultants, I’m convinced that 90% or more of...
Keep Digging. The Problem With Your Cash Flow Isn't What You Think It Is
When you are looking to fix your cash management issues, don’t just look at the symptom. If you don’t dig past the symptoms you are seeing at the surface of a problem, you probably don’t know what your real problem is.
Most of the time when I am asked to come in and resolve issues, I am asked to fix the symptoms of a business’s troubles.
- “I need good job descriptions, so the business runs smoother.”
- “Help me get a loan so I have more capital.”
- “I have a lot of profits. Help me find more cash.”
- “Would you be my part-time CFO, so I can get my finances organized and we can grow again?”
People don’t realize that the symptoms they see and keep them awake at night, are not the real issues that need to be fixed. They try to get rid of the immediate pain and often try short-cuts that do more harm than good.
When I was Leaking Water instead of Cash
Let me tell you a quick story that will give you a better idea...
Cash Management - What it is and what it isn't
I love seeing the wide variety of businesses around the world. It’s one of the reasons that I enjoy working with small to medium sized businesses – there is so much variety and so many ways that people have figured out how to make money. They are so innovative, and it seems like it would be so fun to be part of the team!
These companies generally have:
- Innovative products and services
- Great demand-generating marketing
- A good sales team
- Operational excellence that is generally close to the skill of the founder
After that the business often has weak spots. They generally lack systems and operations that will allow them to scale, especially when it comes to accounting, finance, and cash management.
Between my experience and the conversations that I’ve had with various accountants, bookkeepers, and business consultants, I’m convinced that 90% or more of small and medium sized businesses don’t have good financial management. This includes basic...
