Stress and business go hand in hand. You may not be able to completely take stress out of your business but you can put things in place to control the severity of it and how it affects you.

Poor cash flow can be the greatest cause of stress for you and your business. But it’s never just one thing or event that is causing the problem. So before you start trying to plug multiple holes in your boat maybe you should look at the construction.

Let me make one thing perfectly clear. Cash flow is not profitability. This is a common misconception. But the management of your cash flow can be a determining factor in  your profitability.

Cash flow is exactly what it sounds like: the flow of cash into and out of your business. It represents the operating activities of your business. Your account will tell you that the difference in available cash at the beginning of a period compared to the end of that same period is your cash flow. Positive or negative, black or red is of course is all in the numbers. To have a profitable business you have to have more cash flowing into your business than there is flowing out.

If you are looking to increase your cash flow you obviously need to sell more and reduce costs. Each of those can also be broken down into increasing the selling price of your goods or services and doing a regular audit of your expenses.

It amazes me how many business owners don’t have a better grasp on their regular expenses.  A service or subscription that was signed up for and no longer used. Open accounts or tools used for employees who are no longer with your company.

You may also consider reviewing the net terms on your accounts receivables and your account payables. This can come into play if you are looking to grow or sell your business. Growth is costly and if you are needing more cash flow you may have to consider bringing in more equity or taking out a loan to help with those costs.