As a new franchisee, cash flow can make or break your business. Here are three common cash flow mistakes that people make and what you can do to avoid them.
Not having a cash flow management strategy
One of the first mistakes people make is not having a good strategy in place for their cash flow. You should always be monitoring the money that is coming in as well as what is going out. You need to understand the bills you have and how they fluctuate. Doing this helps you save money in the long term by making better money management decisions.
Not using software tools when managing cash flow
Manually tracking your cash flow can be difficult, and it opens up a risk of errors. Of course, you might handle some cash flow management yourself when you’re getting started to save money, but when you start seeing a big cash flow, you need to have accounting software in place to handle the financial aspect of your business. Working with an accountant is a good idea, as well.
Ignoring changes in sales
Finally, do not ignore changes in sales. Reacting appropriately when sales increase or decrease will help you plan your cash flow better, so you are able to build a more sustainable business over time.
These tips are good for all franchise owners to remember, because your cash flow will largely dictate when you can buy new equipment, hire new workers or otherwise grow your business.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.