Cash Management Secrets

Proven cash management strategies that improve cash flow, collect past due money, and increases profits in tight credit markets.

Your Most Valuable Asset in Business

If you're like so many business owners, only concerned with what your employees are doing, then you are missing out on what could be the hardest working asset in their organization. What is that asset? It is ...

Your money! Is the money in your business working as hard as you do?

Think about it. Your money doesn't get tired. It doesn't complain or want a raise. Money just wants to work, and when it's idle, it's chipped away at by inflation.

Here are some jobs for your money and examples of returns you should expect:

• The Business (15% margin on expenses + cash flow) Every dollar you gain in profit reinvested in the business is money working harder for growth, equity, and customer acquisition.


• Real Estate (6% appreciation on gross + cash flow) Sometimes equal to double digit returns, you are leveraging the banks money to create value and income on a specific real estate asset.


• Direct Loans (13.75% interest + compound on cash flow) Whether payroll advance for employees or peer-to-peer lending programs, you can turn extra cash into contracts that create cash flow.


• Stock Investments (10% interest + compound on cash flow) Even your business deserves some stocks, maybe in your company sponsored retirement program, or in a reserve portfolio for future projects.

Your money wants to work, it never takes sick days, and it really doesn't matter how much you have. It's only critical that you take some of the money the comes in to your business and put it to work.

An exercise for your money: (1) Make a list of where money is already working for you and where it's slacking off. (2) Put more money where it's generating a return on investment, shift money away from losses. (3) Repeat at least quarterly.

There is a specific order to putting your money to work because some jobs take longer than others. It really depends on your businesses objectives. Like employees, regular measurement and observation is required.

I've seen marketing campaigns turn over a 98% return on investment, only to be stopped for an owners desire to own property in a "hot" area -- you must measure everything and if your money is working hard, you can afford both!

A more advanced exercise I teach coaching clients is a monthly "Money Evaluation" done along side of informal employee reviews. Write with your question below if you're interested in learning more about this process and using it in your business.

Posted by Justin Hitt on December 8, 2007 9:12 AM | Permalink

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