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A Pot of Gold, a Four Leaf Clover, and Five Simple Tips for Managing Cash Flow
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A Pot of Gold, a Four Leaf Clover, and Five Simple Tips for Managing Cash Flow

Saint Patrick’s Day, or the Feast of Saint Patrick, is both a cultural and religious holiday that marks the death of patron saint of Ireland – Saint Patrick. While many in the United States – with or without an Irish background – use the day to wear green, drink a bit more than they should, and eat corned beef, it is a day that’s used to celebrate their heritage and culture.

When I think of Saint Patrick’s Day, I think of shamrocks and a pot of gold at the end of a rainbow. The four-leaf clover and pot of gold are generally symbols of luck. As a small business owner, I’m sure you’ve experienced luck as you’ve built your business. Luck, no doubt, plays a role at some point, whether it’s timing, a new client that comes out of nowhere, or a tax break you weren’t expecting. But you can’t rely on luck or a pot of gold at the end of a rainbow when it comes to running your small business. You need to plan and manage your cash flow. How? Here are five simple tips:

  1. Avoid needless spending. Make sure that you, and your employees, adhere to budget spending guidelines and stick to pre-approved expenses. Having a written policy and using expense reports are a good way to keep spending in check.
  1. Look into the future. It’s good to get a good picture of your business financial needs early on and then try to determine how these costs will look as the business grows. Are costs going to be higher than company income as you ramp up? If so, for how long? Many small businesses run at deficits as they grow but you need to understand for how long and at what cost.
  1. Plan for seasonal changes. Does your business experience ups and downs related to seasonality? If so, you need to plan accordingly by putting aside money during busy periods to account for those periods where business may be slow.
  1. Take advantage of loyalty programs. It may sound silly, but there are many loyalty programs out there that allow you to accumulate points and rewards. Staples, as example, has a reward card that offers up to 5% cash back and some discounts on copy and print services, and some banks offer rebates on savings account balances. Here at eCapital, we offer a Fuel Card that provides instant savings at the pump, which our transportation factoring clients really enjoy. Small savings can add up, so take advantage of them!
  1. Consider invoice factoring. Slow paying clients, those with invoice payment terms of 60 or 90 days, can really drag small businesses down. Often times you need cash sooner to even service their business and yet you’re left waiting for payment. Invoice factoringcan be a great way to overcome this payment lag. A factoring company – like eCapital – basically buys the invoice from you with a slight fee, and then assumes all accounts receivable duties. This gets you your money fast and also eliminates the need to deal with the accounting part of payments.

While luck can, and likely will, play some role at your small business, following these five tips may be a more reliable way to increase your chances of achieving success.

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