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By Will Barr, Small Business Deposits Executive at Bank of America


No matter how much revenue your small business may bring in, without a smart cash flow strategy, it can be difficult to stay afloat. According to the fall 2015 Bank of America Small Business Owner Report, more than a third of small business owners nationally are concerned about their cash flow.


Managing cash flow effectively can be tough, but there are steps you can take to make it easier.  I recently participated in a Google Hangout with Rieva Lesonsky, CEO of GrowBiz Media and SmallBizDaily; Max Eliscu, CEO and founder of Viewpost; and USA TODAY senior small business columnist Steve Strauss to discuss this topic and share tips for small business owners who are facing cash flow challenges. Here are some key takeaways from our conversation:


  • Make Realistic Projections. When creating a cash flow strategy, a good place to start is to set realistic expectations of what’s coming in and what’s going out: both payments that you expect to receive as well as your fixed and variable expenses. If you need outside help dealing with incoming payments, companies like Viewpost are designed to help business owners track transactions and manage invoices and payments electronically. The ability to secure payments faster may give you a better idea of incoming funds and a clearer picture of your overall cash flow.


  • Plan for the Unexpected. In case things don’t go exactly as you projected, it’s always good to have a backup plan. If possible, try to maintain a reserve of additional funding to support your business in case of an emergency. Many of these situations may be out of your control, but you can still plan for them. For instance, late-paying customers can cause significant cash flow challenges. As a precaution, consider getting a line of credit to ensure that you have an extra reserve of cash if you need it.


  • Seek Outside Guidance. Managing cash flow can be a daunting challenge – especially if you are just starting out as an entrepreneur or experience change in your business. Luckily, there are plenty of experts on the topic. If you are overwhelmed or unsure about your cash flow strategy, consider seeking the advice of an accountant or a local small business banker. These individuals can help you secure a loan if you need it and will also provide sound financial guidance to best suit your small business needs.


These are just a few of the many tips we discussed on how to effectively manage cash flow in our Google Hangout. For additional insights on this topic, you can watch a recorded replay of the conversation here.


Bank of America, N.A., provides informational articles for your discussion or review only and not responsible for the information and materials third parties present. Please consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

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