Nikki’s Tip of the Week – week-ending 23rd June 2018 & some Opportunities
With all of the ‘increases’ looming, it is imperative, not only for the average Joe Public to tighten the belt a couple of notches, but also for Entrepreneurs to make sure that their “Cash Flow” is in order.
It’s time to ensure that there are sufficient sales being made, that the money that is owed to you is coming in at a respectable pace and of course that your expenses are managed so that you don’t find yourself in a “Cash flow crunch”, fortunately those are the only 3 areas where you are likely to find where the problem is if you are having problems with your cash flow.
Obviously of course you do need either a product or a service to sell, because without that there would be no cash flow to worry about in the first place.
After the Weekly Blog Tip, there is also some exciting news/information/opportunities from the following people:
Colleen Larsen’s Gender Mainstreaming Awards and a Newbie award.
- Here is the link to Louise Mowbray’s profile. Louise is a Leadership coach and yes we all need either coaching or mentoring for us to go to the next level – docdro.id/2m7Wwby
Here’s the deal . . .
Please feel free to engage with me, or not. Please feel free to send me your own snippets of information, early warnings, appropriate funnies and what have you, to share with other like-minded individuals, entrepreneurs and start-ups.
I hope and trust that you will enjoy the journey with me.
This weeks’ Blog:
BUSINESS TIPS – What is Cash Flow
By Nikki Viljoen – Viljoen Consulting (Pty) Ltd
We all hear the words every day – “Cash is King!” Clearly, it is preferable to have physical cash in your hand, than say a cheque or even money in the bank. Why do you think that that is?
Firstly if the money is in the bank, then there may be expenses that still need to go off your account, you would still need to go to the bank to draw money or alternatively you may not have the card or the correct access codes to get the money out of the bank. So having physical cash in your hand is always a good thing.
Let’s have a look at what cash flow is – exactly. Quite simply, it is the physical money that you have access to at any given time. It’s not the money that you are waiting to be paid. It’s not the stock that you are waiting to sell – it’s the physical cash that you have access to at any given time.
Having a good cash flow is absolutely imperative. As SMME’s (Small, Micro, Medium Enterprises) we need a good cash flow in order to purchase our supplies, to pay rent, to pay our staff and to pay our way in the everyday manner in which we conduct our business. In short it is that lifeblood that we need in order to earn our livelihood, without it we would whither up and literally die.
So how do we get this ‘cash flow’?
First of all we need to get money into the business – this is usually referred to as a “cash inflow” and it is usually made of up four different components, these are:
- Sales of our products and/or services – well that’s pretty self- explanatory.
- Loan or credit card proceeds – this is either money that we have loaned from a bank or financial institution or indeed money that we have loaned our business in our personal capacity or money that is coming to us from sales that were paid for by means of credit cards or indeed money that we have ‘borrowed’ on our credit cards, even money that is owed to us by our debtors.
- Asset Sales – this would be when we sell assets (such as old computers or vehicles etc.) that were previously purchased by the company that we are now upgrading or even just getting rid of.
- Owner investments – these would be property or financial and business investments that we have made on behalf of our company.
Then of course money goes out of the business – this is usually referred to as “cash outflow” and again it is usually made up of four different components, these are:
- Business expenditures – these are of course, the expenses that are raised in the normal day to day running of the business. This would also include salaries and wages etc. for the staff.
- Loan or credit card principal payments – just as you got the money either from a loan or your credit card, now you have to pay that loan back or pay your credit card back.
- Asset purchases – again, just as you sold old equipment or equipment that you no longer needed, so now you have to buy new equipment and assets for the business.
- Owner withdrawals – again that is pretty self-explanatory and it is when the owner takes money out of the business for personal use. These drawings are usually offset against the money that the owner has lent to the business out of their loan account.
Both the ‘Cash Inflows’ and the ‘Cash Outflows’ also fit into three main categories within the business and these are:
- Operating – this covers the sales of product and services of your business, together with the business expenses that you incur in the selling of your product and service.
- Investing – this would be all the assets that you buy and sell and
- Financing – this obviously covers all the loans and the repayments of the loans as well as the money that the owner has invested into their business and the withdrawals that they makes for personal use.
So there you have it, basically what cash flow is and the ‘how’ and ‘what’ it relates to.
What’s Happening in the Life of Colleen Larsen & Business Engage
Herewith notice of two additional categories for the 6th Gender Mainstreaming Awards.
INCLUSIVE LEADER AWARD
Nominate an individual for the Inclusive Leader Award.
Nominated by a subordinate, or group of subordinates, this person (male or female) demonstrates business leadership qualities that are aligned to the ethos of gender mainstreaming.
They have ingrained into their leadership style a recognition of the provable benefits to their business that diversity brings, with special emphasis on gender.
The nomination is made by a person or group of people who know the nominee very well, primarily in a business role, and the nominee accepts the nomination in writing.
Visit www.genderawards.co.za/…/…/134-inclusive-leader-award for the criteria for nomination.
POSITIVE ROLE MODEL AWARD
Nominate an individual for the Positive Role Model Award.
The nominee will be a female role model who is acknowledged as a person who is changing the face of gender mainstreaming in her own way; by her actions, deeds, utterances and general mannerisms.
The nominee is nominated by a person or group of people who know her very well, primarily in a business role, and the nominee accepts the nomination in writing.
Visit www.genderawards.co.za/…/135-positive-role-model-awa… for the criteria for nomination