What are Common Cash Flow Mistakes and How to Avoid Them?
Entrepreneurs often make mistakes that can negatively impact cash flow. Some common mistakes include:
Overestimating Revenue: Avoid being overly optimistic about future sales. Base forecasts on historical data and realistic assumptions. Ignoring Seasonality: Many businesses experience seasonal fluctuations in revenue. Plan for these variations to ensure adequate cash reserves during lean periods. Poor Credit Control: Failing to follow up on overdue invoices can lead to cash flow problems. Implement strict credit control measures and consider offering discounts for early payments. Not Having a Cash Reserve: Always maintain a cash reserve to manage unforeseen expenses and emergencies. This can act as a safety net during tough times.