Every session will provide a list of the Big Ideas that you can take away from the audio or video content. This is not an exhaustive list of ideas, so remember to take your own notes!
One of the things that you have to understand as you grow your business is that your cash flow ebbs and flows. Some months you may be slower in business and bringing in less cash while paying more bills.
Some contractors have a cash flow account. This is a line of credit that you can get at the bank which helps ease the times when you have more bills coming in than you do cash.
Setting aside cash in a retained earnings account, or a savings account, may help prevent you from tapping into lines of credit.
When you’re new in business, it’s helpful to avoid the accounts and contractors that have 60-90 days pay. Some may allow you to have draws on a weekly basis, and this will help cash flow.
It may help to avoid commercial work until you are at least at $1MM residential work, because pay in residential work is more immediate.
Cash Flow Management:
- Credit Cards – 60 day terms (retailer + credit card), all transactions in one place
- Cash Flow Account – shorter periods of time, carry balance, minimum payment, interest varies
- Business Loan – set payments, interest rate is set, specific items, lots of options
Business owners need to take precautions with loans and credit because they have a tendency to spend more money than they need to, and will end up in debt. Business loans are most commonly misused to purchase new vehicles.