1) Don’t lose money.
2) Make sure you know what your cash break even is (after debt repayments).
3) Always work to a rolling 13 week cashflow forecast – no business should ever be without one.
4) If your business is growing then you need a longer term cashflow forecast that’ll show you what extra funding you’ll need.
5) Conserve cash, especially in the good times. Put cash away in a reserve account and build a buffer. Don’t look for ways to spend it!
6) Put your corporation tax away every month, it’s not part of your working capital.
7) Put your VAT money away every month too – it’s not your money and so many businesses struggle to make the quarterly VAT payment.
8) Plan ahead for personal tax payments and make sure you’ve got the cash set aside.
9) Invoice your customers straight away where you can, don’t wait until the end of the month.
10) Have a really clear credit policy, tell your customers what they are, put the terms on the invoices, and then make sure you follow through and enforce them.
11) Credit check your new customers, and check your existing ones regularly.
12) Always think hard before taking on new overheads – will this bring more sales in or make us more profitable?
13) Watch how much stock you’re holding – this eats cash.
14) See if you can negotiate better terms with your suppliers.