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Three Financial Promises Your Small Business Needs to Keep

(Handshakes are nice. Signed contracts are better.)

One of the most common concerns for small businesses is cash flow. If this is a challenge for your business, you are certainly not alone. Many of our clients mention on a monthly basis that cash flow is something they regularly struggle with.

Since this is a New Year, let’s wipe the slate clean and make some New Promises about your financial future. Here are three promises you should make to yourself to improve the financial position of your business.

Promise #1: I Will Use Contracts…All the Time

I know this is a hard one! When a friend or a close business acquaintance asks you to provide a service, you want to believe you can rely on a handshake to seal the deal, right? Bringing contracts into the relationship can be awkward. But not having an formal agreement is considered doing free work.

The truth is, contracts hold everyone accountable. They hold you accountable to a specific work product, and they hold the client accountable to paying for that work. If you are in business to get paid, you’ve got to secure agreements for all of your work.

No more handshakes. Make people sign your contracts BEFORE you perform the service. This is for your security, your sanity, and for a healthy and productive small business.

Promise #2: I Will Make Projections About My Business

Businesses that run month-to-month are not successful. These companies have a hard time meeting payroll and keeping the lights on — and they’re usually doomed to fail. There is something about having faith that it will all come together, but you have to support that faith with the work of forecasting sales, profit and resources.

It’s not possible to thrive if you don’t forecast projections for your organization. Carefully map out your projections each month, then work on an action plan that will allow you to work on shortfalls early. Creating projections keeps you focused on your business so you can stay in a positive position all year long.

Promise #3: I Will Get Paid

Remember, this is a business and you need to get paid for the work you do. When you perform a service, bill for it immediately. This will help with cash flow and with projections for your business. When you invoice your clients, follow up to make certain they have received the invoice. Find out when you will be receiving payment. You should commit weekly to following up via phone and email on all outstanding invoices. This process will keep you organized, clear, and motivated about your small business.

You are a Small Business Owner. You are responsible for the success and the failures of your business. Keeping these three promises to your business will keep you organized and give you more time to focus on building success.

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  1. […] to a separate post, this one from Gwendolyn Turner of Credibly, which emphasized the importance of issuing contracts for every service – no matter how small. Contracts, she explained, make sure everyone involved executes their […]

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