What Is Cash Confidence?
Cash Confidence is a money mindset that empowers you to grow your business faster.
When you have cash confidence, you understand how money flows into and out of your business. You have the knowledge you need to plan, organize, direct and control both your personal and business finances.
You feel financially confident and competent.
From Out of Control to Cash Confident
When we first met Alex (not his real name BTW), his company was doing well.. $100,000 in profit that year.
Not too bad, right? ….Wrong!
His cash flow was totally out of control!
There was a mountain of credit card debt. Every month, he struggled to pay the bills and meet payroll. There was zero money available to grow the business or to pay taxes on the $100,000 of profit.
That’s a LOT of stress to live with every day.
Today, Alex is cash confident. Profits are up! Credit card debt is gone. AND there’s money in the bank to pay taxes and grow the business.
Five Secrets for Building Cash Confidence
The good news is, anyone who’s interested can develop cash confidence.
Here are the five secrets to gaining a Cash Confidence mindset.
Secret One -You Are Here
One of the first tools necessary for Cash Confidence is having a clear understanding where your business stands today. That means knowing the good, the bad, and possibly the down right ugly of where your business is right now.
Once you know your starting point, you can set your GPS for your new cash destination.
Secret Two – Mapping Your Customers’ Journey
Secret two in developing Cash Confidence is having a roadmap that shows you the route your customers follow within your business.
Your map will tell you how long it takes to
- Get a lead
- Turn the lead into a sale
- Deliver your product or service
- Get paid
With this information, you can now begin planning for a smooth flow of cash into your business.
Secret Three – Know What You’re Owed
Your bookkeeper or accountant will call this Accounts Receivable.
Basically, Accounts Receivable is money waiting to flow into your bank account. This is money you’ve already earned, but haven’t received from your customer yet.
When you have a consistent way to bill your customer and consistently keep track of who owes you, how much they owe you and when you expect to be paid, you have an essential tool for easily and effectively manage and control your cash.
Secret Four – Know How Much You Owed
Why is it important?
Anyone who has ever paid a bill late can tell you, not taking care of this part your business can quickly become very, very expensive. Late fees and additional interest expenses will rapidly eat away your profit and leave you, the business owner, with a lot less money to pay your personal bills.
Secret Five – Keeping Score
A huge part of building Cash Confidence is simply knowing the score. Taking the time to focus on a few simple things will help you get a better handle on the money in your business.
Here’s what you need to pay attention to regularly
- How much money do you have in your bank account? Check this weekly.
- Look at what you’re owed (Accounts Receivable) weekly.
- Review the list of what you owe others. This includes Accounts Payable, credit cards and loans.
- Pay this month’s bills with money you received last month.
- For the BIG reward, set aside money each month for taxes and building your business.
Ready to learn more?
Becoming more financially knowledgeable and empowered will help you rest easier and give you more energy (and cash) to put toward the aspects of your business you love most.
If you’re ready to take the next step towards building your money mojo, click here to sign up for our free course Cash Flow Made Simple.