Cash Flow problems are responsible for over 70% of business failures within the first year of operations.
How can you ensure a healthy cash flow in your business?
The largest risk of cash-crunch is mix-ups between business and personal bank accounts and credit cards. Cash flow problems often go undetected until it is too late because of the confusion. This situation is very common among start-ups since initial financing often comes from the owner’s personal savings.
One simple solution is to open a separate bank account and credit card for business. Opening separate accounts is a good start, now develop the habit of using the separate account and credit card exclusively for business.
The business bank account is where you deposit customer payments, draw your salary, pay supplier, employees, and taxes. Use a separate credit card exclusively for business-related purchases.
Pay that credit card from the business bank account.
How’s your cash flow?